10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

(Mark One)

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

For the fiscal year ended December 31, 2012

OR

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

For the transition period from                  to

Commission file number: 0001-34145

Primoris Services Corporation

(Exact name of registrant as specified in its charter)

Delaware	20-4743916
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

2100 McKinney Avenue, Suite 1500 Dallas, Texas	75201
(Address of principal executive offices)	(Zip Code)

(214) 740-5600

(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, $0.0001 par value	The NASDAQ Stock Market LLC

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

Indicate by check mark if the registrant is a well-know seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes o  No x

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 o  No x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes x  No o

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 (§ 229.405 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 x  No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III in this Form 10-K or any amendment to this Form 10-K. ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company (as defined in Rule 12b-2 of the Exchange Act).

Large accelerated filer o	Accelerated filer x
Non-accelerated filer o	Smaller Reporting Company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes o  No x

The aggregate market value of the voting common equity held by non-affiliates of the registrant was approximately $395.3 million based upon the closing price of such common equity as of June 29, 2012 (the last business day of the Registrant’s most recently completed second fiscal quarter). On March 1, 2013, there were 51,445,439 shares of common stock, par value $0.0001, outstanding. For purposes of this Annual Report on Form 10-K, in addition to those stockholders which fall within the definition of “affiliates” under Rule 405 of the Securities Act of 1933, holders of ten percent or more of the Registrant’s common stock are deemed to be affiliates.

Documents Incorporated by Reference

Portions of the Proxy Statement to be delivered to stockholders in connection with the Registrant’s 2012 Annual Meeting of Stockholders and to be filed on or before 120 days after the end of the Registrant’s fiscal year end are incorporated by reference into Part III of this Annual Report on Form 10-K. With the exception of those portions that are specifically incorporated in this Annual Report on Form 10-K, such Proxy Statement shall not be deemed filed as part of this Annual Report on Form 10-K or incorporated by reference herein.

TABLE OF CONTENTS

		Page
Part I
Item 1.	Business	2
Item 1A.	Risk Factors	9
Item 1B.	Unresolved Staff Comments	19
Item 2.	Properties	19
Item 3.	Legal Proceedings	20
Item 4.	Mine Safety Disclosures	20
Part II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	21
Item 6.	Selected Financial Data	24
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	44
Item 8.	Financial Statements and Supplementary Data	44
Item 9.	Changes In and Disagreements With Accountants on Accounting and Financial Disclosure	44
Item 9A.	Controls and Procedures	44
Item 9B.	Other Information	45
Part III
Item 10.	Directors, Executive Officers and Corporate Governance	46
Item 11.	Executive Compensation	46
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	47
Item 13.	Certain Relationships and Related Transactions, and Director Independence	47
Item 14.	Principal Accounting Fees and Services	47
Part IV
Item 15.	Exhibits and Financial Statement Schedules	48
Signatures		56
Index to Consolidated Financial Statements		F-1

1

FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which are subject to the “safe harbor” created by those sections. Forward-looking statements include information concerning our possible or assumed future results of operations, business strategies, financing plans, competitive position, industry environment, potential growth opportunities, the effects of regulation and the economy, generally. Forward-looking statements include all statements that are not historical facts and usually can be identified by terms such as “anticipates,” “believes,” “could,” “estimates,” “expects,” “intends, “may,” “plans,” “potential,” “predicts,” “projects,” “should,” “will,” “would” or similar expressions.

Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. We discuss many of these risks in detail in “Item 1A. Risk Factors”.  You should read this Annual Report on Form 10-K completely and with the understanding that our actual future results may be materially different from what we expect.

Given these uncertainties, you should not place undue reliance on forward-looking statements.  Forward-looking statements represent our management’s beliefs and assumptions only as of the date of this Annual Report on Form 10-K.  We assume no obligation to update forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in any forward-looking statements, even if new information becomes available.

PART I

ITEM 1.  BUSINESS

Business Overview

Primoris Services Corporation (“Primoris”, the “Company”, “we”, “us” or “our”) is a holding company of various subsidiaries, which form one of the largest publicly traded specialty contractors and infrastructure companies in the United States.  Serving diverse end-markets, Primoris provides a wide range of construction, fabrication, maintenance, replacement, water and wastewater, and engineering services to major public utilities, petrochemical companies, energy companies, municipalities, state departments of transportation and other customers. With our acquisitions of JCG in 2009, Rockford in 2010 and four additional acquisitions in 2012, Primoris has more than tripled its size in revenues since 2009.  The Company’s national footprint now extends nearly nationwide and in to Canada.

We install, replace, repair and rehabilitate natural gas, refined product, water and wastewater pipeline systems, large diameter gas and liquid pipeline facilities, heavy civil projects, earthwork and site development and also construct mechanical facilities and other structures, including power plants, petrochemical facilities, refineries and parking structures. In addition, we provide maintenance services, including inspection, overhaul and emergency repair services, to cogeneration plants, refineries and similar mechanical facilities. Through our subsidiary OnQuest, Inc., we provide engineering and design services for fired heaters and furnaces primarily used in refinery applications. Through our subsidiary Cardinal Contractors, Inc., we construct water and wastewater facilities in Florida and Texas.

The Company’s common stock trades on the NASDAQ Select Global Market under the symbol “PRIM”.  In February 2008, Primoris Corporation (referred to as “Former Primoris”), a privately-held company, entered into an Agreement and Plan of Merger with Rhapsody Acquisition Corp. (“Rhapsody”), a publicly-held company.  Rhapsody was founded as a special purpose acquisition company in 2006, and we became a public company in July 2008 when, the merger was completed and Rhapsody changed its name to “Primoris Services Corporation”.

Our service capabilities and geographic footprint have expanded through the following acquisitions.

First, on December 18, 2009, we acquired James Construction Group, LLC, a privately-held Florida limited liability company (“JCG”).  JCG is one of the largest general contractors based in the Gulf Coast states and is engaged in highway, industrial and environmental construction, primarily in Louisiana, Texas and Florida.  JCG is the successor company to T. L. James and Company, Inc., a Louisiana company that has been in business for over 80 years.  Headquartered in Baton Rouge, Louisiana, JCG serves government and private clients in a broad geographical region that includes the entire Gulf Coast region of the United States.

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Second, on November 8, 2010, the Company entered into an agreement (the “Rockford Agreement”) to acquire privately-held Rockford Corporation (“Rockford”).  Upon completion of the transaction on November 12, 2010, Rockford became a wholly owned subsidiary.  Based in Hillsboro (Portland), Oregon, Rockford specializes in construction of large diameter natural gas and liquid pipeline projects and related facilities.

And third, during 2012, we made four acquisitions:

1.On March 12, 2012, we purchased certain assets of Sprint Pipeline Services, L.P. (“Sprint”), headquartered in Pearland (outside Houston), Texas.  Sprint provides a comprehensive range of pipeline construction, maintenance, upgrade, fabrication and specialty services primarily in the southeastern United States.

2.On May 30, 2012, we purchased certain assets of Silva Contracting Company, Inc., Tarmac Materials, LLC and C3 Interest, LLC (collectively, “Silva”).  Based outside of Houston, Texas, Silva provides transportation infrastructure maintenance, asphalt paving, and material sales in the Gulf Coast region of the United States.  Following this acquisition, Silva was merged with the operations of JCG.

3.On September 28, 2012, we purchased certain assets of The Saxon Group, Inc. (“Saxon”).  Based in Suwannee, Georgia, outside Atlanta, Saxon is a full service industrial construction enterprise with special expertise in the industrial gas processing and power plant sectors.

4.On November 17, 2012, we purchased all of the issued and outstanding shares of stock of Q3 Contracting, Inc., a privately-held Minnesota corporation (“Q3C”).  The sellers elected to treat the acquisition as an asset purchase under Section 338(h)(10) of the Internal Revenue Code.  Based in Little Canada, Minnesota, north of St. Paul, Minnesota, Q3C specializes in small diameter pipeline and gas distribution construction, restoration and other services, primarily in the upper Midwest region of the United States.

The Company segregates the business into three operating segments:  the East Construction Services segment, the West Construction Services segment and the Engineering segment.

Range of Services — East and West Construction Services

Both the East Construction Services and the West Construction Services segments specialize in a range of services that include designing, building/installing, replacing, repairing/rehabilitating and providing management services for construction related projects. Our services include:

·Providing installation of underground pipeline, cable and conduits for entities in the petroleum, petrochemical and water industries;

·Providing installation and maintenance of industrial facilities for entities in the petroleum, petrochemical and water industries;

·Providing installation of complex commercial and industrial cast-in-place structures; and

·Providing construction of highways and industrial and environmental construction.

East Construction Services

The East Construction Services segment consists of business located primarily in the southeastern United States and along the Gulf Coast.  The segment includes the JCG heavy civil, industrial and infrastructure and maintenance operations headquartered in Baton Rouge, Louisiana; water and wastewater construction operations of Cardinal Contractors, Inc. located in Sarasota, Florida; and the newly acquired operations of Sprint, Silva and Saxon.

West Construction Services

The West Construction Services segment consists of businesses located primarily in the western United States.  The segment includes the underground and industrial operations of ARB, Inc., headquartered in Lake Forest, California; the operations of Rockford, which while headquartered in Hillsboro, Oregon, performs its major capital underground work throughout the United States; the operations of ARB Structures, Inc., Alaska Continental Pipeline, Inc., All Day Electric Company, Inc. (100% owned in 2011 and 50% in prior years), Stellaris, LLC, Primoris Renewables, Inc. and Juniper Rock, Inc.  The segment also includes the operations of the Blythe Power Constructors joint venture and newly acquired Q3 Contracting, Inc.

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Engineering

The Engineering segment includes the results of OnQuest, Inc. and Born Heaters Canada, ULC.  The Engineering group specializes in designing, supplying, and installing high-performance furnaces, heaters, burner management systems, and related combustion and process technologies for clients in the oil refining, petrochemical, and power generation industries. It furnishes turnkey project management with technical expertise and the ability to deliver custom engineering solutions worldwide.

Detailed information regarding the revenues, operating results and total assets for each segment is contained in our audited financial statements at the end of this Annual Report on Form 10-K.

Trends

We continue to operate in a challenging business environment with increasing regulatory requirements and only gradual recovery in the economy from the recessionary levels of the past four years.  Economic and regulatory issues have adversely affected our customers and have affected demand for our services, and demand may continue to be impacted as conditions slowly improve.  The additional uncertainty associated with federal sequestration and budget issues only adds to the difficulty in predicting the timing or magnitude that industry trends may have on our business, particularly in the near-term.

For our underground services, we expect that the opportunities for natural gas pipeline construction will increase over the next few years.   Development of gas shale formations throughout North America has resulted in a significant increase in the natural gas supply, leading to an apparent long-term reduction in natural gas prices.   .   As one of the cleanest-burning fossil fuels, low-cost natural gas supports the U.S. goals of energy independence from foreign energy sources, which may be achieved in the next two decades, and a cleaner environment.  The existing pipeline infrastructure appears to be insufficient to meet the growing natural gas demand which could lead to opportunities for new pipeline construction.  In addition, the recently passed Pipeline Safety, Regulatory Certainty, and Job Creation Act of 2011, authorized the Pipeline and Hazardous Materials and Safety Administration to promulgate new rules for pipeline integrity.  These rules are in addition to various state regulations.  We believe that these integrity testing requirements will increase the demand for our underground services.  We have the ability to offer construction and maintenance of large diameter pipeline, mid-stream pipeline and gathering lines in both our West and East construction services segments.

The U.S. Energy Information Administration has stated that the number of natural gas-fired power plants built will increase significantly over the next two decades. In addition, as renewable energy generation continues to increase and become a larger percentage of the overall power generation mix, natural gas may well be the fuel used to provide backup power generation.   A significant contributor to the revenue and profitability of the West Construction Services segment is construction of electrical power generation facilities.  Demand for electric power is expected to grow, especially in large population centers such as California.  That demand may be met by renewable energy sources, such as solar power, or by converting current facilities to more efficient sources of power.  We expect that this continuing demand growth will provide significant opportunities for our construction services over time.  During 2012, we completed an acquisition that adds major construction experience for gas plants to our East Construction Services segment.  We also expect that the continuing long-term low cost of natural gas could lead to heavy industrial opportunities as coal-fired power plants are converted to natural gas and as chemical plants that use natural gas as a feedstock expand.  The low price may also lead to the development and construction of LNG facilities, which would provide opportunity for both our engineering and construction segments.

We also expect that renewable energy projects will provide construction opportunities over the next few years.  Almost two thirds of the states have adopted renewable portfolio standards or goals.  In many locations, the development and construction of solar and wind facilities requires the building of “peaker” plants to meet demand when the renewable resources are not available.  In addition, alternative energy sources such as “waste-to-power” facilities provide long-term construction opportunities.

Our highway construction services are finding a challenging market in the near-term.  Declining tax revenues, budget deficits, financing constraints and competing priorities have resulted in cutbacks in new infrastructure projects in the public sector.  Some funding sources that have been specifically earmarked for infrastructure spending, such as diesel and gasoline taxes, are not as directly affected by a stagnant or declining economy, unless actual consumption is reduced. However, even these can be temporarily at risk as state and local governments struggle to balance their budgets. Additionally, high fuel prices can have a dampening effect on consumption, resulting in overall lower tax revenue.  Offsetting these challenges is the need for continuing improvements and additions in highway infrastructure and the perception of federal and state funding of transportation projects as an investment in infrastructure.  Our highway construction is focused on the states of Louisiana, Texas and Mississippi.  Of these states, Texas continues to increase its highway construction budget while the other two states have cut back in the current environment.

Strategy

Our strategy emphasizes the following key elements:

·Diversification Through Controlled Expansion.  We continue to emphasize the expansion of our scope of services beyond our traditional focus by increasing the scope of services offered to current customers and by adding new customers.  In December 2009, we completed the acquisition of JCG and in November 2010 we completed the acquisition of Rockford as part of this strategy.  In 2012, we acquired four additional companies, including Sprint, Silva, Saxon and Q3C.  We intend to continue to evaluate acquisitions that offer growth opportunities and the ability to leverage our resources as a leading service provider to the oil and gas, power, refining and water industries. Our strategy also considers potential selective expansion to new geographic regions.

·Emphasis on Retention of Existing Customers and Recurring Revenue.  In order to fully leverage our relationships with our existing customer base, we believe it is important to maintain strong customer relationships and to expand our base of recurring revenue sources and recurring customers.

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·Ownership of Equipment.  Many of our services are equipment intensive. The cost of construction equipment, and in some cases the availability of construction equipment, provides a significant barrier to entry into several of our businesses. We believe that our ownership of a large and varied construction fleet and our maintenance facilities enhances our access to reliable equipment at a favorable cost.

·Stable Work Force.  In each of our separate segments, we maintain a stable work force of skilled, experienced laborers, many of whom are cross-trained in projects such as pipeline and facility construction, refinery maintenance, and piping systems.

·Selective Bidding.  We selectively bid on projects that we believe offer an opportunity to meet our profitability objectives, or that offer the opportunity to enter promising new markets. In addition, we review our bidding opportunities to attempt to minimize concentration of work with any one customer, in any one industry, or in stressed labor markets.  We believe that by carefully positioning ourselves in market segments that have meaningful barriers of entry, we can position ourselves so that we compete with other strong, experienced bidders.

Backlog

Backlog is discussed in Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Annual Report on Form 10-K.

Customers

Historically, we have longstanding relationships with major utility, refining, petrochemical, power and engineering companies. We have completed major underground and industrial projects for a number of large natural gas transmission and petrochemical companies in the western United States, as well as significant projects for our engineering customers.  Through JCG, we expanded our customer base to include a significant presence in the Gulf Coast region of the United States and with Q3C, expanded into the upper Midwest United States and with Rockford we are expanding throughout the United States.  The various acquisitions have also changed the composition of our customer base with significant increases in public state agency projects. We enter into a large number of contracts each year and the projects can vary in length — from several weeks, to as long as 48 months for completion on larger projects. Although we have not been dependent upon any one customer in any year, a small number of customers tend to constitute a substantial portion of our total revenues.

Our customers have included many of the leading energy and utility companies in the United States, including, among others,  Conoco Phillips, British Petroleum, Pacific Gas & Electric, Sempra Energy, Williams, Valero, Chevron, Calpine, Kinder Morgan and El Paso Corporation.

The following customers accounted for more than 5% of our revenues in the periods indicated:

Description of customer’s business	2012		2011		2010
Texas DOT	5.8	%	*		5.0	%
Public gas and electric utility	14.6	%	11.3	%	7.3	%
Gas utility	5.6	%	*		*
Private gas and electric utility	6.9	%	*		*
Louisiana DOT	11.1	%	16.4	%	20.5	%
Gas utility (Ruby Pipeline Project)	0.8	%	18.8	%	8.4	%
Totals	44.8	%	46.5	%	41.2	%

(*)Indicates a customer with less than 5% of revenues during such period.

As shown in the table, the customers accounting for revenues in excess of 5% each year varies from year to year due to the nature of our business.  A large construction project for a customer may result in significant revenues in that particular year, with significantly less revenues in subsequent years after project completion.

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For the years ended December 31, 2012, 2011 and 2010, approximately 55.9%, 68.5% and 55.3%, respectively, of total revenues were generated from the top ten customers of the Company in each year.  In each of the years, a different group of customers comprised the top ten customers by revenue.

At December 31, 2012, approximately 10.0% of the Company’s accounts receivable were due from one customer, and that customer provided 14.6% of the Company’s revenues for the year ended December 31, 2012.   At December 31, 2011, approximately 15.5% of the Company’s accounts receivable were due from the same customer, which provided 11.3% of the Company’s revenues for the year ended December 31, 2011.

Management at each of our operating units is responsible for developing and maintaining successful long-term relationships with customers. Our operating unit management teams build existing customer relationships to secure additional projects and increase revenue from our current customer base.  Operating unit managers are also responsible for pursuing growth opportunities with prospective new customers.

We believe that our strategic relationships with customers will result in future opportunities. Some of our strategic relationships are in the form of strategic alliance or long-term maintenance agreements.  However, we realize that future opportunities also require cost effective bids as pricing is a key element for most construction projects.

Ongoing Projects

The following is a summary of significant ongoing construction projects demonstrating our capabilities in different markets at December 31, 2012:

Segment	Project	Location	Approximate Contract Amount		Estimated Completion Date	Remaining Backlog at December 31, 2012
			(Millions)			(Millions)
West Construction Services	550 MW Combined Cycle Plant	El Segundo, CA	$	185	08/2013	$	70
West Construction Services	Solar Energy Project	Blythe, CA	$	80	01/2014	55
West Construction Services	118 mile 20” gas pipeline	Newark, OH	$	95	11/2013	95
West Construction Services	Waste water collection system	Las Osos, CA	$	25	08/2014	20
East Construction Services	IH 35 from S.363 to N.363	Temple, LA	$	240	05/2017	240
East Construction Services	IH 35 Salado to Belton	Salado, TX	$	110	08/2014	60
East Construction Services	NW Loop 363	Temple, LA	$	40	12/2014	35
Engineering	Waste Heat Recovery	Australia	$	35	08/2013	5

Competition

We face substantial competition on large construction projects from both regional and national contractors. Competitors on small construction projects range from a few large construction companies to a variety of smaller contractors. We compete with many local and regional firms for construction services and with a number of large firms on select projects. Each business segment faces varied competition depending on the type of project and services offered.

We compete with different companies in different end markets.  Large competitors in our underground markets include Quanta Services, Inc., MasTec Inc. and Willbros Group; competitors in our industrial end markets include Kiewit Corporation; and competitors in our highway services include Sterling Construction Company, Boh Brothers and Zachary Construction Company.

We believe that the primary factors influencing competition in our industry are price, reputation for quality, delivery and safety, relevant experience, availability of skilled labor, machinery and equipment, financial strength, knowledge of local markets and conditions, and estimating abilities. We believe that we compete favorably in all of the foregoing factors.

Geographic Areas — Financial Information

The following table sets forth our revenues from external customers attributable to our operations in the countries identified below for the years ended December 31, 2012, 2011 and 2010, and the total assets located in those countries for the years ended December 31, 2012 and 2011.  The amounts shown are in millions of dollars.  Our revenue from operations in the United States is related to projects primarily in the geographic United States. Our revenue from operations in Canada is primarily derived from our Engineering segment’s office in Calgary, Canada, but relates to specific projects in other countries, especially in the Far East and Australia.

	Year Ended December 31,									Total Assets at
	2012			2011			2010			December 31,
Country	Revenue		%	Revenue		%	Revenue		%	2012		2011
United States	$	1,531	99.3	$	1,448	99.2	$	920	97.7	$	921	$	719
Non-United States	11		0.7	12		0.8	22		2.3	10		9
TOTAL	$	1,542	100.0	$	1,460	100.0	$	942	100.0	$	931	$	728

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All non-United States revenue was generated in the Engineering Segment.  For the table above, revenues generated by OnQuest’s Canadian subsidiary, Born Heaters Canada, ULC, were used to estimate non-United States revenues.

Risks Attendant to Foreign Operations

In 2012, as set forth in the table above, approximately 0.7% of our revenue was attributable to external customers in foreign countries. The current expectation is that a similar portion of revenue will continue to come from international projects for the foreseeable future.  Though a small portion of our revenues, international operations are subject to foreign economic and political uncertainties and risks as disclosed more fully in Item 1A “Risk Factors” of this Annual Report.  Unexpected and adverse changes in the foreign countries in which we operate could result in project disruptions, increased costs and potential losses. Our business is subject to fluctuations in demand and to changing domestic and international economic and political conditions which are beyond our control.

Contract Provisions and Subcontracting

We typically structure contracts as unit-price, time and material, fixed-price or cost plus fixed fee.  A substantial portion of our revenue is derived from contracts that are fixed price or fixed unit price contracts. Under a fixed price contract, we undertake to provide labor, equipment and services required by a project for a competitively bid or negotiated fixed price. The materials required under a fixed price contract, such as pipe, turbines, boilers and vessels are often supplied by the party retaining us. Under a fixed unit price contract, we are committed to providing materials or services required by a project at fixed unit prices. While the fixed unit price contract shifts the risk of estimating the quantity of units required for a particular project to the party retaining us, any increase in our unit cost over the unit price bid, whether due to inflation, inefficiency, faulty estimates or other factors, is borne by us.

Construction contracts are primarily obtained through competitive bidding or through negotiations with long-standing customers. We are typically invited to bid on projects undertaken by recurring customers who maintain pre-qualified contractor lists. Contractors are selected for the pre-approved contractor lists by virtue of their prior performance for such customers, as well as their experience, reputation for quality, safety record, financial strength and bonding capacity.

In evaluating bid opportunities, we consider such factors as the customer, the geographic location of the work, the availability of labor, our competitive advantage or disadvantage relative to other likely contractors, our current and projected workload, the likelihood of additional work, and the project’s cost and profitability estimates. We use computer-based estimating systems and our estimating staff has significant experience in the construction industry. The project estimates form the basis of a project budget against which performance is tracked through a project cost system, thereby enabling management to monitor a project. Project costs are accumulated and monitored weekly against billings and payments to assure proper control of cash flow on the project.

Most contracts provide for termination of the contract for the convenience of the owner. In addition, many contracts are subject to certain completion schedule requirements with liquidated damages in the event schedules are not met. To date, these provisions have not materially adversely affected us.

We act as prime contractor on a majority of the construction projects we undertake. In the construction industry, the prime contractor is normally responsible for the performance of the entire contract, including subcontract work. Thus, we are potentially subject to increased costs associated with the failure of one or more subcontractors to perform as anticipated. While we subcontract specialized activities such as blasting, hazardous waste removal and electrical work, we perform most of the work on our projects with our own resources, including labor and equipment.

Our gas distribution services are typically provided pursuant to renewable contracts on a “unit-cost” basis. Fees on unit-cost contracts are negotiated and are earned based on units completed. Historically, substantially all of the gas distribution customers have renewed their maintenance contracts. Facilities maintenance services, such as regularly scheduled and emergency repair work, are provided on an ongoing basis at predetermined rates.

Risk Management, Insurance and Bonding

We maintain general liability and excess liability insurance, covering our construction equipment, and workers’ compensation insurance, in amounts consistent with industry practices. In the States of California, Texas and Louisiana, we self-insure our workers’ compensation claims in an amount of up to $250,000 per occurrence, and we maintain insurance covering larger claims. In addition, we maintain umbrella coverage, and we believe that our insurance programs are adequate.

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We maintain a diligent safety and risk management program that has resulted in a favorable loss experience factor. Through our safety director and the employment of a large staff of regional and site specific safety managers, we have been able to effectively assess and control potential losses and liabilities in both the pre-construction and performance phases of our projects. Though we strongly focus on safety in the workplace, we cannot give assurances that we can prevent or reduce all injuries or claims in our workplace.

In connection with our business, we generally are required to provide various types of surety bonds guaranteeing our performance under certain public and private sector contracts. Our ability to obtain surety bonds depends upon our capitalization, working capital, backlog, past performance, management expertise and other factors and the surety company’s current underwriting standards.  To date, we have obtained the level of surety bonds necessary for the needs of our business.

Regulation

Our operations are subject to various federal, state, local and international laws and regulations including:

·Licensing, permitting and inspection requirements;

·Building codes;

·Permitting and inspection requirements applicable to construction projects; and

·Special bidding, procurement and other requirements on government projects.

We believe that we have all the licenses required to conduct our operations and that we are in substantial compliance with applicable regulatory requirements.

Environmental Matters and Climate Change Impacts

We are subject to numerous federal, state, local and international environmental laws and regulations governing our operations, including the handling, transportation 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 sent 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 use our properties as collateral for financing.

In addition, we could be held liable for significant penalties and damages under certain environmental laws and regulations and also could be subject to a revocation of our licenses or permits, which could materially and adversely affect our business and results of operations. Our contracts with our customers may also impose liabilities on us regarding environmental issues that arise through the performance of our services.  From time to time, we may incur costs and obligations for correcting environmental noncompliance matters and for remediation at or relating to certain of our properties. We believe that we are in substantial compliance with our environmental obligations to date and that any such obligations will not have a material adverse effect on our business or financial performance.

The potential physical impacts of climate change on our operations are highly uncertain. Climate change may result in, among other things, changes in rainfall patterns, storm patterns and intensities and temperature levels. As discussed elsewhere in this Annual Report on Form 10-K, including in Item 1A. “Risk Factors”, our operating results are significantly influenced by weather. Therefore, significant changes in historical weather patterns could significantly impact our future operating results. For example, if climate change results in significantly more adverse weather conditions in a given period, we could experience reduced productivity, which could negatively impact our revenues and gross margins.

Climate change could also affect our customers and the types of projects that they award.  Demand for power projects, underground pipelines or highway projects could be affected by significant changes in weather.  Reductions in project awards could adversely affect our operations and financial performance.

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Employees

We believe that our employees are our most valuable resource in successfully completing construction work. Our ability to maintain sufficient continuous work for approximately 5,000 hourly employees helps us to instill in our employees loyalty to and understanding of our policies and contributes to our strong production, safety and quality record.

As of December 31, 2012, we employed approximately 1,184 salaried employees and approximately 5,727 hourly employees.  The total number of hourly personnel employed is subject to the volume of construction in progress. During the calendar year 2012, the number of employees ranged from approximately 4,800 employees to 8,100 employees.

The following is a summary of employees by function and geography at December 31, 2012:

	CA	LA	TX	MS	CO	MN	Other US	Canada	Total
Salaried	300	316	320	19	30	55	108	36	1,184
Hourly	1,539	1,512	1,313	192	197	163	811	0	5,727
Total	1,839	1,828	1,633	211	227	218	919	36	6,911

Several of our subsidiaries have operations that are unionized through the negotiation and execution of collective bargaining agreements. These collective bargaining agreements have varying terms and are subject to renegotiation upon expiration. We have not experienced recent work stoppages and believe our employee and union relations are good.

Website Access and Other Information

Our website address is www.prim.com. You may obtain free electronic copies of our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and any amendments to these reports through our website under the “Investor Relations” tab or through the website of the Securities and Exchange Commission (the “SEC”) at www.sec.gov. These reports are available on our website as soon as reasonably practicable after we electronically file them with, or furnish them to, the SEC. In addition, our Corporate Governance Guidelines, Code of Ethics and Business Conduct (including a separate code which applies to our CEO, CFO and senior financial executives) and the charters of our Audit Committee, Compensation Committee and Governance and Nominating Committee are posted on our website under the “Investor Relations/Corporate Governance” tab.  We intend to disclose on our website any amendments or waivers to our Code of Ethics and Business Conduct that are required to be disclosed pursuant to Item 5.05 of Form 8-K. You may obtain copies of these items from our website.

We will make available to any stockholder, without charge, copies of our Annual Report on Form 10-K as filed with the SEC. For copies of this or any other information, stockholders should submit a request in writing to Primoris Services, Inc., Attn: Corporate Secretary, 2100 McKinney Avenue, Suite 1500, Dallas, TX 75201.

This Annual Report on Form 10-K and our website may contain information provided by other sources that we believe are reliable. However, we cannot assure you that the information obtained from other sources is accurate or complete. No information on our website is incorporated by reference herein and should not be considered part of this Annual Report.

ITEM 1A.  RISK FACTORS

Our business is subject to a variety of risks and uncertainties, many of which are described below. The following list is not all-inclusive, and there can be no assurance that we have correctly identified and appropriately assessed all factors affecting our business or that the publicly available and other information with respect to these matters is complete and correct. Additional risks and uncertainties not presently known to us or that we currently believe to be immaterial also may have a material adverse effects on our business, financial condition and results of operations in the future.

Risks Related to Our Business and Operations

Our financial and operating results may vary significantly from quarter-to-quarter and year-to-year, which may adversely affect the price and value of your common stock.

Our annual and quarterly results may be adversely affected by:

·Changes in our mix of customers, projects, contracts and business;

·Regional and/or general economic conditions;

·Variations and changes in the margins of projects performed during any particular quarter;

·Increases in the costs to perform services caused by changing weather conditions;

·The termination of existing agreements or contracts;

·The budgetary spending patterns of customers;

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·Increases in construction costs that we may be unable to pass through to our customers;

·Cost or schedule overruns on fixed-price contracts;

·Availability of qualified labor for specific projects;

·Changes in bonding requirements and bonding availability for existing and new agreements;

·Costs we incur to support growth whether organic or through acquisitions;

·The timing and volume of work under contract; and

·Losses experienced in our operations.

As a result of these factors, our operating results in any particular quarter may not be indicative of the results that you may expect for any other quarter or for the entire year. Such fluctuations in our financial and operating results may affect the value of your common stock.

Our business is labor intensive. We depend on key personnel and we may not be able to operate and grow our business effectively if we lose the services of any of our key personnel or are unable to attract qualified and skilled personnel in the future. This could lead to a decrease in our overall competitiveness, resulting in an adverse effect on our business, operating results, financial condition and value of your common stock.

We are dependent upon the efforts of our key personnel, and our ability to retain them and hire other qualified employees. In particular, we are dependent upon the management and leadership of Brian Pratt, who is our Chief Executive Officer, as well as other members of executive and senior management. The loss of any of the executive officers or other key personnel could affect our ability to run our business effectively. Competition for senior management personnel is intense, and we may not be able to retain our personnel even though we have entered into employment agreements with certain of them. The loss of any key person requires the remaining key personnel to divert immediate and substantial attention to seeking a replacement. An inability to find a suitable replacement for any departing executive or senior officer on a timely basis could adversely affect our ability to operate and grow our business.

Our ability to maintain our productivity and profitability 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 adequately skilled labor force necessary to operate efficiently and to support our growth strategy. We have from time-to-time experienced, and may in the future experience, shortages of certain types of qualified personnel. For example, periodically there are shortages of engineers, project managers, field supervisors, and other skilled workers capable of working on and supervising the construction of underground, heavy civil and industrial facilities, as well as providing engineering services. The supply of experienced engineers, project managers, field supervisors and other skilled workers may not be sufficient to meet current or expected demand. At the end of 2012, we are receiving anecdotal evidence of a shortage of qualified welders in the United States.  The beginning of new, large-scale infrastructure projects or increased competition for workers currently available to us, could affect our business, even if we are not awarded such projects. Labor shortages or increased labor costs 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 occurrence of any of the foregoing could have an adverse effect on our business, operating results, financial condition and value of our common stock.

We may be unsuccessful at generating internal growth, which may affect our ability to expand our operations or grow our business, which may cause an adverse effect on our financial condition, results of operations and cash flows.

Our ability to generate internal growth may 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 for new projects; and

·Adapt the range of services we offer to address our customers’ evolving construction needs.

In addition, our customers may reduce the number or size of projects available to us due to their inability to obtain capital.  Our customers may also reduce projects in response to economic conditions.

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 and the failure to do so could have an adverse effect on our financial condition, results of operation and cash flows.

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Demand for our services may decrease during economic recessions or volatile economic cycles, and the reduction in demand may adversely affect our business.

The engineering and construction industries historically have experienced cyclical fluctuations in financial results due to economic recessions, downturns in business cycles of our customers, material shortages, price increases by subcontractors, interest rate fluctuations and other economic factors beyond our control. When the general level of economic activity deteriorates, our customers may delay or cancel upgrades, expansions, and/or maintenance and repairs to their systems. Many factors, including the financial condition of the industry, could adversely affect our customers and their willingness to fund capital expenditures in the future.

At the end of 2012, the economy is slowly recovering from the recent recession.  The economic conditions have adversely impacted the demand for our services and resulted in the delay, reduction or cancellation of certain projects and may continue to adversely affect us in the future. Additionally, many of our customers finance their projects through the incurrence of debt or the issuance of equity. If the availability of credit remains uncertain, a continued reduction in our customers spending for services could have a material adverse affect on our operations and our ability to grow at historical levels.

Much of the work that we perform in the highway markets involves funding by federal, state and local governments.  In the current budgetary and political environment, funding for these projects could be reduced significantly, which could have a material adverse affect on our operations and financial results.

We are also dependent on the amount of work our customers outsource. In a slower economy, our customers may decide to outsource less infrastructure services reducing demand for our services. In addition, consolidation, competition or capital constraints in the industries we serve may result in reduced spending by our customers.

Industry trends and government regulations could reduce demand for our pipeline construction services.

The demand for our pipeline construction services is dependent on the level of capital project spending by companies in the oil and gas industry.  This level of spending is subject to large fluctuations depending primarily on the price of oil and natural gas.  The price is a function of many factors, including levels of supply and demand, government polices and regulations, oil industry refining capacity and the potential development of alternative fuels.

Specific government decisions could affect demand for our construction services.  For example, a limitation on the use of “fracking” technology, or a decision to not build a major pipeline, such as occurred in 2012, could significantly affect the revenues and profitability of our operations.

We derive a significant portion of our revenues from a few customers, and the loss of one or more of these customers could have significant effects on our revenues, resulting in adverse effects on our financial condition, results of operations and cash flows.

Our customer base is highly concentrated, with our top ten customers accounting for approximately 55.9% of our revenue in 2012, 68.5% of our revenue in 2011 and 55.0% of our revenue in 2010. Our revenue could significantly decline if we lose one or more of our significant customers. In addition, revenues under our contracts with significant customers may vary from period-to-period depending on the timing and volume of work performed.  Reduced demand for our services or a loss of a significant customer could have an adverse effect on our financial condition, results of operations and cash flows.

Our actual cost may be greater than expected in performing our fixed-price and unit-price contracts, causing us to realize significantly lower profits or losses on our projects, which would have an adverse effect on our financial condition, results of operations and cash flows.

We currently generate, and expect to continue to generate, a portion of our revenue and profits under fixed-price and unit-price contracts. The approximate portion of revenue generated from fixed-price contracts for the years 2012, 2011 and 2010 was 51%, 38% and 40%, respectively.  The approximate portion of revenue generated from unit-price contracts for the years 2012, 2011 and 2010 was 30%, 28% and 32%, respectively.  In general, we must be able to estimate the costs of completing a specific project to bid these types of contracts. The actual cost of labor and materials may vary from the costs we originally estimated, and we may not be successful in recouping additional costs from our customers. These variations, may cause gross profits for a project to differ from those we originally estimated.  Reduced profitability or losses on projects could occur due to changes in a variety of factors such as:

·Failure to properly estimate costs of engineering, materials, equipment or labor;

·Unanticipated technical problems with the structures, materials or services being supplied by us, which may require that we spend our own money to remedy the problem;

·Unreimbursable project modifications creating unanticipated costs;

·Changes in the costs of equipment, materials, labor or subcontractors;

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·Our suppliers or subcontractors failure to perform;

·Changes in local laws and regulations, and;

·Delays caused by local weather conditions.

As projects grow in size and complexity, these factors may combine, and depending on the size of the particular project, variations from the estimated contract costs could have a material adverse effect on our financial condition, results of operations and cash flows.

We may lose business to competitors through the competitive bidding processes, which could have an adverse effect on our financial condition, results of operations and cash flows.

We are engaged in highly competitive businesses in which most customer contracts are awarded through bidding processes based on price and the acceptance of certain risks. We compete with other general and specialty contractors, both foreign and domestic, including large international contractors and small local contractors. The strong competition in our markets requires maintaining skilled personnel and investing in technology, and it also puts pressure on profit margins.  We do not obtain contracts from all of our bids and our inability to win bids at acceptable profit margins would adversely affect our financial condition and results of operations.

We may pay our suppliers and subcontractors before receiving payment from our customers for the related services; we could experience an adverse affect on our financial condition, results of operations and cash flows.

We use subcontractors and material suppliers for portions of certain work, and our customers pay us for those related services. If we pay our suppliers and subcontractors for materials purchased and work performed for customers who fail to pay, or such customers delay in paying us for the related work or materials, we could experience a material adverse effect on our financial condition, results of operations and cash flows.

Our unionized workforce may commence work stoppages, which could adversely affect our operations.

As of December 31, 2012, approximately 37% of our hourly employees, primarily consisting of field laborers, were covered by collective bargaining agreements. Of the 72 collective bargaining agreements to which we are a party, nineteen expire during 2013 and require renegotiation.  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 would adversely impact our relationships with our customers and could have an adverse effect on our financial condition, results of operations and cash flows.

Our ability to complete future acquisitions could be adversely affected because of our union status for a variety of reasons. For instance, in certain geographic areas, our union agreements may be incompatible with the union agreements of a business we want to acquire and some businesses may not want to become affiliated with a union company.  In addition, if we acquire a union affiliated company, we may increase our future exposure to withdrawal liabilities for any underfunded pension plans.

The current Federal administration has expressed strong support for legislation and regulation that would create more flexibility and opportunity for labor unions to organize non-union workers. This legislation or regulation could result in a greater percentage of our workforce being subject to collective bargaining agreements.

Withdrawal from multiemployer pension plans associated with our unionized workforce could adversely affect our financial condition and results of operations.

Our collective bargaining agreements generally require that we participate with other companies in multiemployer pension plans. To the extent those plans are underfunded, the Employee Retirement Income Security Act of 1974 (“ERISA”), as amended by the Multiemployer Pension Plan Amendments Act of 1980 (“MEPA”), may subject us to substantial liabilities under those plans if we withdraw from them or they are terminated. In addition, the Pension Protection Act of 2006 added new funding rules generally applicable to plan years beginning after 2007 for multiemployer plans that are classified as endangered, seriously endangered or critical status.  For a plan in critical status, additional required contributions and benefit reductions may apply if a plan is determined to be underfunded, which could adversely affect our financial condition or results of operations.  For plans in critical status, we may be required to make additional contributions, generally in the form of surcharges on contributions otherwise required.  Participation in those plans with high funding levels could adversely affect our results of operations, financial condition or cash flows if we are not able to adequately mitigate these costs.

The amount of the withdrawal liability legislated by ERISA and MEPA varies for every pension plan to which we contribute.  For each plan, our liability is the total unfunded vested benefits of the plan multiplied by a fraction:  the numerator of the fraction is the sum of our contributions to the plan for the past ten years and the denominator is the sum of all contributions made by all employers for the past ten years.  For some pension plans to which we contribute, the unfunded vested benefits are in the billions of dollars.  If we cannot reduce the liability through exemptions or negotiations, the withdrawal from a plan could have a material adverse impact on our financial condition, results of operations and cash flows.

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Our business growth could outpace the capability of our internal infrastructure and may prohibit us from expanding our operations or execute our business plan, which failures may adversely affect the value of our common stock.

Our internal infrastructure may not be adequate to support our operations as they expand. 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. We often bid for work knowing that we will have to rent equipment on a short-term basis, and we include our assumptions of market equipment rental rates in our bid. If market rates for rental equipment increase between the time of bid submission and project execution, our margins for the project may be reduced. In addition, our equipment requires continuous maintenance, which we generally provide through our own repair facilities. If we are unable to continue to maintain the equipment in our fleet, we may be forced to obtain additional third-party repair services at a higher cost or be unable to bid on contracts.

A significant portion of our business depends on our ability to provide surety bonds and we may be unable to compete for or work on certain projects if we are not able to obtain the necessary surety bonds, which could result in an adverse affect on our financial condition, results of operations and cash flows.

Our contracts frequently require that we provide payment and performance bonds to our customers. 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 bonds.

Current or future market conditions, as well as changes in our surety providers’ assessments of our operating and financial risk, could cause our surety providers to decline to issue or renew, or to substantially reduce, the availability of bonds for our work and could increase our bonding costs. These actions could be taken on short notice. If our surety providers were to limit or eliminate our access to bonding, our alternatives would include seeking bonding capacity from other sureties, finding more business that does not require bonds and posting other forms of collateral for project performance, such as letters of credit or cash. We may be unable to secure these alternatives in a timely manner, on acceptable terms, or at all. Accordingly, if we were to experience an interruption or reduction in the availability of bonding capacity, we may be unable to compete for or work on certain projects and such interruption or reduction could have an adverse effect on our financial condition, results of operations and cash flows.

Our bonding requirements may limit our ability to incur indebtedness, which would limit our ability to refinance our existing credit facilities or to execute our business plan, and potentially result in an adverse effect on our business.

Our ability to obtain surety bonds depends upon various factors including our capitalization, working capital, tangible net worth and amount of our indebtedness. In order to help ensure that we can obtain required bonds, we may be limited in our ability to incur additional indebtedness that may be needed to refinance our existing credit facilities upon maturity and to execute our business plan. Our inability to incur additional indebtedness could have an adverse effect on our business, operating results and financial condition.

Our business may be affected by difficult work sites and environments, which may adversely affect our ability to procure materials and labor, which may adversely affect our overall business.

We perform our work under a variety of conditions, including, but not limited to, difficult and hard to reach terrain, difficult site conditions and busy urban centers where delivery of materials and availability of labor may be impacted. Performing work under these conditions can slow our progress, potentially causing us to incur contractual liability to our customers. These difficult conditions may also cause us to incur additional, unanticipated costs that we might not be able to pass on to our customers.

We are self-insured against potential liabilities.

Although we maintain insurance policies with respect to employer’s liability, general liability, auto and workers compensation claims, those policies are subject to a deductible of $250,000 per occurrence. We are primarily self-insured for all claims that do not exceed the amount of the applicable deductible. In addition, for our employees not part of a collective bargaining agreement, we provide employee health care benefit plans.  Our primary health insurance plan is subject to a deductible of $150,000 per claimant per year.

Our insurance policies include various coverage requirements, including the requirement to give appropriate notice. If we fail to comply with these requirements, our coverage could be denied.

Losses under our insurance programs are accrued based upon our estimates of the ultimate liability for claims reported and an estimate of claims incurred but not reported.  Insurance liabilities are difficult to assess and estimate due to unknown factors, including the severity of an injury, the extent of damage, the determination of our liability in proportion to other parties and the number of incidents not reported. The accruals are based upon known facts and historical trends, and management believes the accruals are adequate. If we were to experience insurance claims or costs significantly above our estimates, our results of operations could be adversely affected in a given period.

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

When we acquire a business, we record an asset called “goodwill” for the excess amount we pay for the business, including liabilities assumed, over the fair value of the tangible and intangible assets of the business we acquire. We have made various acquisitions, including the acquisitions of JCG, Rockford, Sprint, Silva, Saxon and Q3C.  We recorded approximately $114.8 million in goodwill and $73.7 million of intangible assets in connection with these acquisitions based on the application of the acquisition method of accounting.  At the time of the acquisitions, management makes certain estimates and assumptions when allocating goodwill to reporting units and determining the fair value of a reporting unit’s net assets and liabilities, including, among other things, an assessment of market conditions, projected cash flows, investment rates, cost of capital and growth rates.  Fair value was determined using a combination of the discounted cash flow, market multiple and market capitalization valuation approaches.  Under current accounting rules, goodwill and other intangible assets that have indefinite useful lives cannot be amortized, but instead must be tested at least annually for impairment, while intangible assets that have finite useful lives are amortized over their useful lives. As discussed in Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies”, the accounting literature provides specific guidance for testing goodwill and non-amortized intangible assets for impairment.  Any future impairment of the goodwill or intangible assets recorded in connection with the various acquisitions, or for any future acquisitions, would negatively impact our results of operations for the period in which the impairment is recognized.

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

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, punitive damages, and civil penalties or other losses or injunctive or declaratory relief. In addition, we generally indemnify our customers for claims related to the services we provide and actions we take under our contracts with them, and, in some instances, we may be allocated risk through our contract terms for actions by our customers or other third parties. Because our services in certain instances may be integral to the operation and performance of our customers’ infrastructure, we may become subject to lawsuits or claims for any failure of the systems that we work on, even if our services are not the cause of such failures, and we could be subject to civil and criminal liabilities to the extent that our services contributed to any property damage, personal injury or system failure. The outcome of any of these lawsuits, claims or legal proceedings could result in significant costs and diversion of management’s attention to the business. Payments of significant amounts, even if reserved, could adversely affect our reputation, liquidity and results of operations.

We may incur liabilities or suffer negative financial or reputational impacts relating to 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. Although we have taken what we believe are appropriate precautions, we have suffered fatalities in the past and may suffer additional fatalities in the future. Serious accidents, including fatalities, may subject us to substantial penalties, civil litigation or criminal prosecution. Claims for damages to persons, including claims for bodily injury or loss of life, could result in substantial costs and liabilities, which could materially and adversely affect our financial condition, results of operations or cash flows. In addition, if our safety record were to substantially deteriorate over time or we were to suffer substantial penalties or criminal prosecution for violation of health and safety regulations, our customers could cancel our contracts and not award us future business.

We may incur additional healthcare costs arising from federal healthcare reform legislation.

In March 2010, the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010 were signed into law in the U.S. This legislation expands health care coverage to many uninsured individuals and expands coverage to those already insured. The changes required by this legislation could cause us to incur additional healthcare and other costs.  The employee insurance requirements are expected to impact our expenses beginning in 2014.  At the end of 2012, our independent insurance broker estimated that our insurance costs could increase by $14 million annually.  While we anticipate increases in our customer billing rates to reflect the increased expense, there can be no guarantee that we will be able to pass these costs to our customers or that our competition will increase their bids to reflect the increased healthcare costs.  For our multi-year highway projects, we may not be able to anticipate further increases in healthcare costs associated with the healthcare reform legislation.

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Opportunities within the government arena could subject us to increased governmental regulation and costs.

Most government contracts are awarded through a regulated competitive bidding process. As we pursue increased opportunities in the government arena, management’s focus may be diverted away from other opportunities. Involvement with government contracts could require incurring a significant amount of costs before any revenues are realized from these contracts. In addition, as a government contractor, we would be subject to a number of procurement rules and other public sector liabilities, any deemed violation of which could lead to fines or penalties or a loss of business. Government agencies routinely audit and investigate government contractors. Government agencies may review a contractor’s performance under its contracts, cost structure, and compliance with applicable laws, regulations and standards. If government agencies determine through these audits or 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. In addition, if the government were to allege improper activity, we could experience serious harm to our reputation. Many government contracts must be appropriated each year. If appropriations are not made in subsequent years, we would not realize all of the potential revenues from any awarded contracts.

Inability to perform our obligations under Engineer, Procure and Construct (“EPC”) contracts may lead to higher costs, which would adversely affect our business.

EPC contracts require us to perform a range of services for our customers, some of which we routinely subcontract to other parties. The portion of revenue generated from EPC contracts for 2012, 2011 and 2010 was approximately 3%, 6% and 5%, respectively. The portion of gross profit generated from EPC contracts for 2012, 2011 and 2010 was approximately 4%, 9% and 4%, respectively. In most instances, these contracts require completion of a project by a specific date, achievement of certain performance standards or performance of our services at certain standards of quality. If we subsequently fail to meet such dates or standards, we may be held responsible for costs resulting from such failure. Our inability to obtain the necessary material and equipment to meet a project schedule or the installation of defective material or equipment could have an adverse effect on our financial condition, results of operations and cash flows.

We require subcontractors to assist us in providing certain services, and we may be unable to retain the necessary subcontractors to complete certain projects resulting in an adverse affect in our business.

We use subcontractors to perform portions of our contracts and to manage workflow, particularly for design, engineering, procurement and some foundation work. We are not dependent on any single subcontractor. However, general market conditions may limit the availability of subcontractors to perform portions of our contracts causing delays and increases in our costs, which could have an adverse effect on our financial condition, results of operations and cash flows.

Backlog may not be realized or may not result in revenues or profits.

Backlog is measured and defined differently by companies within our industry. We refer to “backlog” as our estimated revenue on uncompleted contracts, including the amount of revenue on contracts on which work has not begun, less the revenue we have recognized under such contracts. 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. For our time-and-equipment, time-and-materials and cost-plus contracts, we do not include projected revenue in the calculation of backlog, regardless of the duration of the contract, unless we know the total contract value. In addition, we work with some of our customers under master service agreements (“MSAs”). We do not include any projected revenue from MSAs in our calculation of backlog; however, we include backlog for projects awarded with known scope and revenue.

Most contracts may be terminated by our customers on short notice. Reductions in backlog due to cancellation 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, we may be reimbursed for certain costs, but we typically have no contractual right to the total revenues reflected in our backlog. Projects may remain in backlog for extended periods of time. 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. Inability to realize revenue from our backlog could have an adverse effect on our financial condition, results of operations and cash flows.

Recognition of revenues from backlog does not necessarily insure that projects will be profitable.

Our use of percentage-of-completion accounting could result in a reduction or elimination of previously reported profits, which may result in an adverse affect on our financial condition and results of operations.

We recognize revenue using the percentage-of-completion method of accounting, using the cost-to-cost method, where revenues are estimated based on the percentage of costs incurred to date to total estimated costs. This method is used because management considers expended costs to be the best available measure of progress on these contracts. The earnings or losses recognized on individual contracts are based on estimates of total contract revenues, total costs and profitability. Contract losses are recognized in full when determined, and contract profit estimates are adjusted based upon ongoing reviews of contract profitability.

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Penalties are recorded when known or finalized, which generally is during the latter stages of the contract. In addition, we record adjustments to estimated costs of contracts when we believe the change in the 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. In certain circumstances, it is possible that such adjustments could be significant and could have an adverse effect on our financial condition, results of operations and cash flows, especially when comparing the results of several periods.

Our financial results are based upon estimates and assumptions that may differ from actual results and such differences between the estimates and actual results may have an adverse affect on our financial condition, results of operations and cash flows.

In preparing our consolidated annual and quarterly financial statements in conformity with generally accepted accounting principles, many estimates and assumptions are used by management in determining the reported 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 cannot be calculated with a high degree of precision from data available, is dependent on future events, or is not capable of being readily calculated based on generally accepted methodologies. Often times, these estimates are particularly difficult to determine, and we must exercise significant judgment. Estimates may be used in our assessments of the allowance for doubtful accounts, useful lives of property and equipment, fair value assumptions in analyzing goodwill and long-lived asset impairments, self-insured claims liabilities, revenue recognition under percentage-of-completion accounting and provisions for income taxes. Actual results for estimates could differ materially from the estimates and assumptions that we use, which could have an adverse effect on our financial condition, results of operations and cash flows.

The timing of new contracts may result in unpredictable fluctuations in our cash flow and profitability, which could adversely affect our business.

Substantial portions of our revenues are derived from project-based work that is awarded through a competitive bid process. The portion of revenue generated from the competitive bid process for 2012, 2011 and 2010 was approximately 69%, 73% and 76%, respectively. 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 award 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 and reduce our cash flows. Even if we are awarded contracts, we face additional risks that could affect whether, or when, work will begin. For example, some of our contracts are subject to financing, permitting and other contingencies that may delay or result in termination of projects. We may have 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, resulting in unpredictability in our cash flow, expenses and profitability. If any 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 by a customer and may expose us to potential credit risk if the customer encounters financial difficulties. Finally, the winding down or completion of work on significant projects that were active in previous periods will reduce our revenue and earning if the significant projects have not been replaced in the current period.

If we fail to integrate acquisitions successfully, we may experience operational challenges and risks which may have an adverse effect on our business and results of operations.

As part of our growth strategy, we intend to acquire companies that expand, complement or diversify our business.  Acquisitions may expose us to operational challenges and risks, including, among others:

·The diversion of management’s attention from the day-to-day operations of the combined company;

·Managing a significantly larger company than before completion of an acquisition;

·The assimilation of new employees and the integration of business cultures;

·Retaining key personnel;

·The integration of information, accounting, finance, sales, billing, payroll and regulatory compliance systems;

·Challenges in keeping existing customers and obtaining new customers;

·Challenges in combining service offerings and sales and marketing activities;

·The assumption of unknown liabilities of the acquired business for which there are inadequate reserves;

·The potential impairment of acquired goodwill and intangible assets; and

·The inability to enforce covenants not to compete.

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If we cannot effectively manage the integration process or if any significant business activities are interrupted as a result of the integration process of any acquisition, our business could suffer and our results of operations and financial condition may be negatively affected.

Our reported results of operations and financial condition could be adversely affected as a result of changes in accounting standards.

The Financial Accounting Standards Board has announced that it expects to finalize standards in the near future affecting revenue recognition and accounting for leases.  Significant changes in either of these accounting standards could result in changes in the way we report our financial results.  For example, if the lease accounting standard changes the accounting for operating leases, we may need to negotiate changes to our credit agreements to meet certain financial covenants.  If we were unable to successfully negotiate these changes, we could negatively impact our ability to maintain or obtain future credit for growth opportunities.

We may not be successful in continuing to meet the internal control requirements of the Sarbanes-Oxley Act of 2002.

The Sarbanes-Oxley Act of 2002 has many requirements applicable to us regarding corporate governance and financial reporting, including the requirements for management to report on our internal controls over financial reporting and for our independent registered public accounting firm to express an opinion over the operating effectiveness of our internal control over financial reporting. As of December 31, 2012, our internal control over financial reporting was effective; however, there can be no assurance that our internal control over financial reporting will be effective in future years. Failure to maintain effective internal controls or the identification of significant internal control deficiencies in acquisitions already made or made in the future could result in a decrease in the market value of our common stock, the reduced ability to obtain financing, the loss of customers, penalties and additional expenditures to meet the requirements in the future.

Our business may be materially adversely impacted by regional, national and/or global requirements to significantly limit or reduce greenhouse gas emissions in the future.

Greenhouse gases that result from human activities, including burning of fossil fuels, are the focus of increased scientific and political scrutiny and may be subjected to various legal requirements. International agreements, federal laws, state laws and various regulatory schemes limit or otherwise regulate emissions of greenhouse gases, and additional restrictions are under consideration by different governmental entities. We derive a significant amount of revenues and contract profits from engineering and construction services to clients that own and/or operate a wide range of process plants and own and/or operate electric power generating plants that generate electricity from burning natural gas or various types of solid fuels. These plants may emit greenhouse gases as part of the process to generate electricity or other products. Compliance with the existing greenhouse gas regulation may prove costly or difficult. It is possible that owners and operators of existing or future process plants and electric generating plants could be subject to new or changed environmental regulations that result in significantly limiting or reducing the amounts of greenhouse gas emissions, increasing the cost of emitting such gases or requiring emissions allowances. The costs of controlling such emissions or obtaining required emissions allowances could be significant. It also is possible that necessary controls or allowances may not be available. Such regulations could negatively impact client investments in capital projects in our markets, which could negatively impact the market for our products and/or services. This could materially adversely affect our business, financial condition, results of operations and cash flows.

Changes to renewable portfolio standards and decreased demand for renewable energy projects could negatively impact our future results of operations, cash flows and liquidity.

A significant portion of our future business may be focused on providing construction and/or installation services to owners and operators of solar power and other renewable energy facilities. Currently, the development of solar and other renewable energy facilities is highly dependent on tax credits, the existence of renewable portfolio standards and other state incentives. Renewable portfolio standards are state-specific statutory provisions requiring that electric utilities generate a certain amount of electricity from renewable energy sources.  These standards have initiated significant growth in the renewable energy industry and a potential demand for renewable energy infrastructure construction services. Since renewable energy is generally more expensive to produce, elimination of, or changes to, existing renewable portfolio standards, tax credits or similar environmental policies may negatively affect future demand for our services.

17

Our international operations expose us to legal, political and economic risks in different countries as well as currency exchange rate fluctuations that could harm our business and financial results.  We could be adversely affected by our failure to comply with laws applicable to our foreign activities, such as the U.S. Foreign Corrupt Practices Act.

During 2012 and 2011, revenue attributable to our services outside of the United States was approximately 0.7% and 0.8% of our total revenue, respectively. While much of this revenue is derived from the operations of our Canadian subsidiary, Born Heaters, ULC, actual construction operations have occurred in the several far eastern countries and in Australia. There are risks inherent in doing business internationally, including:

·Imposition of governmental controls and changes in laws, regulations, policies, practices, tariffs and taxes;

·Political and economic instability;

·Changes in United States and other national government trade policies affecting the market for our services;

·Potential non-compliance with a wide variety of laws and regulations, including the United States Foreign Corrupt Practices Act (FCPA) and similar non-United States laws and regulations;

·Currency exchange rate fluctuations, devaluations and other conversion restrictions;

·Restrictions on repatriating foreign profits back to the United States; and

·Difficulties in staffing and managing international operations.

The FCPA and similar anti-bribery laws in other jurisdictions prohibit U.S.-based companies and their intermediaries from making improper payments to non-U.S. officials for the purpose of obtaining or retaining business. We pursue opportunities in certain parts of the world that experience government corruption, and in certain circumstances, compliance with anti-bribery laws may conflict with local customs and practices. Our internal policies mandate compliance with all applicable anti-bribery laws. We require our partners, subcontractors, agents and others who work for us or on our behalf to comply with the FCPA and other anti-bribery laws. There is no assurance that our 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 our 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 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.

Any of these factors could have a material adverse effect on our business, financial condition, results of operations and cash flows. We review foreign operations annually to determine the viability and outlook for those operations.

Risks Related to our Common Stock

Our common stock is subject to potential dilution to our stockholders.

As part of our acquisition strategy, we have issued shares of common stock and used shares of common stock as a part of contingent earn-out consideration.  Our Articles of Incorporation permit us to issue up to 90 million shares of common stock of which 51.4 million were outstanding at December 31, 2012.  While NASDAQ rules require that we obtain shareholder approval to issue more than 20% additional shares, shareholder approval is not required below that level. In addition, we can issue shares of preferred stock which could cause further dilution to the shareholder, resulting in reduced net income and cash flow available to common stockholders.

In 2011, the Board of Directors determined that independent director compensation would include issuance of stock from the 2008 Long-term Incentive Equity Plan at a discount to the average market price of a previous month.  In addition, the Compensation Committee of the Board of Directors approved issuance of common shares of stock from the 2008 Long-term Incentive Equity Plan at a discount to the average market price for the previous month to management level employees as part of a long-term incentive plan.  In 2012 a total of 434,154 shares were issued and the Company repurchased 89,600 shares of stock under a repurchase program during 2012.  This resulted in a net increase of 344,554 shares issued in 2012.  In 2011, a total of 1,699,532 shares were issued for earn-out, director compensation and management incentive plans, resulting in a dilution of approximately 0.7% in 2012 and 3.4% in 2011.  The continuation of the director compensation plan and the management long-term incentive plan will further dilute our current stockholders.

If we do not meet listing requirements, the NASDAQ Global Market may delist our securities from quotation on its exchange, which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions.

The Company is listed on the NASDAQ Global Market exchange, which has certain listing requirements with which we must comply.  If we do not do so, we may be unable to maintain the listing of our securities in the future.

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If NASDAQ delists our securities from trading on its exchange, we could face significant material adverse consequences, including:

·A limited availability of market quotations for our securities;

·A limited amount of news and analyst coverage for our company; and

·A decreased ability to issue additional securities or obtain additional financing in the future.

Some of our director-officers and officers are significant stockholders, which may make it possible for them to have significant influence over the outcome of matters submitted to our stockholders for approval and their interests may differ from the interests of our other stockholders.

As of December 31, 2012, four of our director-officers beneficially owned an aggregate in excess of approximately 30.7% of the outstanding shares of our common stock. Our chairman and chief executive officer beneficially owned and had the power to vote approximately 27.6% of the outstanding shares of our common stock at December 31, 2012. These stockholders may have significant influence over the outcome of all matters submitted to our stockholders for approval, including the election of our directors and other corporate actions. Such influence could have the effect of discouraging others from attempting to purchase us or take us over and could reduce the market price offered for our common stock.

ITEM 1B.UNRESOLVED STAFF COMMENTS

None.

ITEM 2.PROPERTIES

Facilities

Our executive offices are located at 2100 McKinney Avenue, Suite 1500, Dallas, Texas 75201. The telephone number of our executive office is (214) 740-5600. The East Construction Services segment of our business has regional offices located in Baton Rouge, Louisiana, in Houston, Conroe and Pasadena, Texas, Birmingham, Alabama, Suwanee, Georgia and in Sarasota and Fort Lauderdale, Florida. The West Construction Services segment has regional offices located in Lake Forest, Pittsburg, San Francisco, Bakersfield and San Diego, California and offices located in Hillsboro, Oregon, Toledo, Washington, Montrose, Pennsylvania and Little Canada, Minnesota.  The Engineering segment of our business has offices located in San Dimas, California and in Calgary, Canada.

We lease most of the facilities used in our operations. The leases are generally for 10 to 12-year terms, expiring through 2022.  The aggregate lease payments made for our facilities in 2012 were $4.7 million. We believe that our facilities are adequate to meet our current and foreseeable requirements for the next several years.

We lease some of our facilities, employees and certain construction and transportation equipment from Stockdale Investment Group, Inc. (“SIGI”).  All of these leases were entered into on similar terms as negotiated with an independent third party. Brian Pratt, one of our largest stockholders and our Chief Executive Officer, President and Chairman of the Board of Directors, holds a majority interest in SIGI and is the chairman and chief executive officer and a director of SIGI.  John M. Perisich, our Senior Vice President and General Counsel, is secretary of SIGI.

Property, Plant and Equipment

We own and maintain both construction and transportation equipment. In 2012, 2011 and 2010, we spent approximately $40.3 million, $29.1 million and $23.6 million, respectively, in cash for property and equipment. Additionally, we acquired property and equipment through the use of capital leases of approximately $2.9 million in 2012, $5.3 million in 2012 and none in 2010.  We estimate that our capital equipment includes the following:

·Heavy construction and specialized equipment—1,286 units; and

·Transportation equipment—2,311 units.

We believe the ownership of equipment is preferable to leasing to ensure the equipment is available as needed. In addition, ownership has historically resulted in lower equipment costs. We attempt to obtain projects that will keep our equipment fully utilized in order to increase profit. All equipment is subject to scheduled maintenance to insure reliability. Maintenance facilities exist at most of our regional offices as well as on-site on major jobs to properly service and repair equipment. Major equipment not currently utilized is rented to third parties whenever possible to supplement equipment income.

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The following summarizes total property, plant and equipment, net of accumulated depreciation, as of December 31, 2012 and 2011:

	2012			2011			Useful Life
	(In Thousands)			(In Thousands)
Land and buildings	$	24,358		$	18,987		30 years
Leasehold improvements	17,530			5,597			Lease life
Office equipment	2,092			1,203			3 - 5 years
Construction equipment	197,200			158,978			3 - 7 years
Transportation equipment	48,649			28,475			3 - 18 years
	289,829			213,240
Less: accumulated depreciation and amortization	(104,989		)	(83,591		)
Net property, plant and equipment	$	184,840		$	129,649

ITEM 3.LEGAL PROCEEDINGS

Legal Proceedings

We are from time to time subject to claims and legal proceedings arising out of our business. Our management believes that we have meritorious defenses to the claims. Although we are unable to ascertain the ultimate outcome of such matters, after review and consultation with counsel and taking into consideration relevant insurance coverage and related deductibles, management believes that the outcome of these matters will not have a materially adverse effect on our financial condition or results of operations.

Government Regulations

Our operations are subject to compliance with regulatory requirements of federal, state, and municipal agencies and authorities, including regulations concerning labor relations, affirmative action and the protection of the environment. While compliance with applicable regulatory requirements has not adversely affected operations in the past, there can be no assurance that these requirements will not change and that compliance with such requirements will not adversely affect operations.

ITEM 4.MINE SAFETY DISCLOSURES

Not applicable.

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PART II

ITEM 5.MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market Information

On July 31, 2008, our common stock began trading on the NASDAQ Global Market under the symbol “PRIM”. Previously, our common stock traded on the OTC Bulletin Board under the ticker symbol “RPSD”. Prior to their expiration on October 2, 2010, the Company had certain warrants and unit purchase options outstanding that were traded under the NASDAQ Global Market under the symbols “PRIMW” and “PRIMU”, respectively.

We had outstanding 51,403,686 shares of common stock and 302 stockholders of record as of December 31, 2012. These holders of record include depositories that hold shares of stock for brokerage firms, which in turn, hold shares of stock for numerous beneficial owners.

The following table shows the range of market prices of our common stock during 2012 and 2011.

	Market price per Share
	High		Low
Year ended December 31, 2012
First quarter	$	16.94	$	14.94
Second quarter	$	16.33	$	11.01
Third quarter	$	13.63	$	11.90
Fourth quarter	$	15.04	$	13.25
Year ended December 31, 2011
First quarter	$	10.14	$	8.18
Second quarter	$	13.34	$	10.22
Third quarter	$	14.19	$	9.66
Fourth quarter	$	15.26	$	10.20

Dividends

The following table shows cash dividends to our common stockholders declared by the Company during the three years ended December 31, 2012:

Declaration Date	Payable Date	Record Date	Type
March 4, 2010	April 15, 2010	March 31, 2010	$	0.025 per share
May 11, 2010	July 15, 2010	June 30, 2010	$	0.025 per share
August 6, 2010	October 15, 2010	September 30, 2010	$	0.025 per share
November 5, 2010	January 15, 2011	December 31, 2010	$	0.025 per share
March 3, 2011	April 15, 2011	March 31, 2011	$	0.025 per share
May 6, 2011	July 15, 2011	June 30, 2011	$	0.025 per share
August 4, 2011	October 14, 2011	September 30, 2011	$	0.03 per share
November 3, 2011	January 16, 2012	December 31, 2011	$	0.03 per share
February 24, 2012	April 16, 2011	March 30, 2012	$	0.03 per share
May 4, 2012	July 16, 2012	June 29, 2012	$	0.03 per share
August 3, 2012	October 15, 2012	October 1, 2012	$	0.03 per share
November 1, 2012	December 26, 2012	December 18, 2012	$	0.03 per share

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The payment of future dividends is contingent upon our revenues and earnings, capital requirements and general financial condition of the company, as well as contractual restrictions and other considerations deemed relevant by the Board of Directors.

Equity Compensation Plan Information

In March 2012, our employees purchased 111,790 shares of stock as part of a management incentive compensation program.  As part of the quarterly compensation of the non-employee members of the Board of Directors, the Company issued 12,395 shares of common stock in February 2012 and 15,280 shares in July 2012.  The issuance of the employee shares and the director shares were under the terms of the 2008 Primoris Long-Term Incentive Equity Plan (“2008 Equity Plan”).

The following table gives information about our common stock that may be issued upon the exercise of options, warrants and rights under all of our existing equity compensation plans as of December 31, 2012.

Plan category	Number of securities to be issued upon exercise of outstanding options, warrants and rights (a)	Weighted-average exercise price of outstanding options, warrants and rights (b)	Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c)
Equity compensation plans approved by security holders	0	0	1,270,744
Equity compensation plans not approved by security holders	0	0	0
Total	0	0	1,270,744

These securities represent shares of common stock available for issuance under our 2008 Equity Plan.  The 2008 Equity Plan is discussed in Note 2 to our consolidated financial statements for the year ended December 31, 2012 included in Part II, Item 8 “Financial Statements and Supplementary Data”.

Repurchases of Securities

In May 2012, the Company’s Board of Directors authorized a share repurchase program under which the Company may, from time to time and depending on market conditions, share price and other factors, acquire shares of its common stock on the open market or in privately negotiated transactions up to an aggregate purchase price of $20 million. During the period from May 2012 through June 2012, the Company purchased and cancelled 89,600 shares of stock for $1.0 million at an average cost of $11.17 per share. The share repurchase program expired on December 31, 2012.

Unregistered Sales of Securities during 2011 and 2012

The Company issued 62,052 unregistered shares of our common stock as part of the consideration for the March 2012 acquisition of Sprint and 29,273 shares were issued in February 2013 as part of the consideration for the acquisition of Q3C.

We completed the November 2010 acquisition of Rockford for which a portion of the consideration consisted of 1,605,709 unregistered shares of common of the Company, including providing for contingent earnout consideration to the sellers if Rockford achieved certain financial performance targets.  The consideration included the potential issuance of unregistered Company common stock.  A total of 494,095 shares of unregistered common stock were issued to the sellers in the first quarter 2011 and 232,637 unregistered shares in April 2012, as a result of meeting the 2010 target and the 2011 target, respectively.

A total of 1,095,646 shares of the Company’s common stock was issued to JCG’s former members in the first quarter of 2011 as a result of JCG meeting a defined performance target for 2010.  The number of shares was calculated in accordance with the purchase agreement.

All securities listed on the following table are issued shares of our common stock. Contingent consideration not yet issued is not included in the table. We relied on Section 4(2) of the Securities Act, as the basis for exemption from registration. For all issuances, we believe the shares were issued to “accredited investors” as defined in Rule 501 of the Securities Act.  All issuances were as a result of privately negotiated transactions, and not pursuant to public solicitations.

Period	Number of Shares	Purchaser	Consideration
January 1, 2010 through December 2010	1,605,709 common shares	Stockholders of acquired companies	Part of consideration in sale of acquired company
March 1, 2011 through December 31, 2011	1,589,741 common shares	Stockholders of acquired companies	Achievement of financial targets as contingent consideration in sale of acquired companies
January 1, 2012 through December 31, 2012	232,637 common shares	Stockholders of acquired companies	Achievement of financial target as contingent consideration in sale of acquired company
January 1, 2012 through December 31, 2012	62,052 common shares	Stockholders of acquired companies	Part of consideration in sale of acquired company
January 1, 2013 through February 28, 2013	29,273 common shares	Employees and Stockholders of acquired companies	Part of consideration in sale of acquired company

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Performance Graph

The following Performance Graph and related information shall not be deemed to be filed with the Securities and Exchange Commission, nor shall such information be incorporated by reference into any future filing under the Securities Act of 1933 or Securities Exchange Act of 1934, each as amended, except to the extent that we specifically incorporate it by reference into such filing.

The following graph compares the cumulative total return to holders of the Company’s common stock during the period from August 6, 2008, the first day of trading in the Company’s common stock, and in each quarter up to December 31, 2012. The return is compared to the cumulative total return during the same period achieved on the Standard & Poor’s 500 Stock Index (the “S&P 500”) and a peer group index selected by our management that includes five public companies within our industry (the “Peer Group”). The Peer Group is composed of MasTec, Inc., Matrix Service Company, Quanta Services, Inc., Sterling Construction Company, Inc. and Willbros Group, Inc.  The companies in the Peer Group were selected because they comprise a broad group of publicly held corporations, each of which has some operations similar to ours. When taken as a whole, management believes the Peer Group more closely resembles our total business than any individual company in the group.

The returns are calculated assuming that an investment with a value of $100 was made in the Company’s common stock and in each stock as of August 6, 2008, the first day of trading after the July 31, 2008 merger.  All dividends were reinvested in additional shares of common stock, although the comparable companies did not pay dividends during the periods shown. The Peer Group investment is calculated based on a weighted average of the five company share prices. The graph lines merely connect the measuring dates and do not reflect fluctuations between those dates. The stock performance shown on the graph is not intended to be indicative of future stock performance.

COMPARISON OF AUGUST 6, 2008 THROUGH DECEMBER 31, 2012

CUMULATIVE TOTAL RETURN

Among Primoris Services Corporation (“PRIM”), the S&P 500 and the Peer Group

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ITEM 6.SELECTED FINANCIAL DATA

The following selected financial data should be read in conjunction with Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our audited financial statements and the accompanying notes included elsewhere in this Annual Report on Form 10-K.

	Year Ended December 31,
	2012			2011			2010			2009			2008
	(In thousands except per share data)
Statement of Operations Data:
Revenues	$	1,541,734		$	1,460,150		$	941,765		$	467,010		$	597,822
Cost of revenues	1,349,024			1,274,947			818,976			391,435			527,380
Gross profit	192,710			185,203			122,789			75,575			70,442
Selling, general and administrative expense	96,424			86,204			64,985			34,781			30,544
Merger related stock expense	—			—			—			390			4,050
Operating income	96,286			98,999			57,804			40,404			35,848
Other income (expense)	(4,182		)	(2,266		)	(2,129		)	7,707			6,380
Income from continuing operations, before income taxes	92,104			96,733			55,675			48,111			42,228
Income tax provision	(33,837		)	(38,174		)	(22,059		)	(18,350		)	(4,926		)
Income from continuing operations	$	58,267		$	58,559		$	33,616		$	29,761		$	37,302
Loss from discontinued operations, net of tax—(1)	—			—			—			(3,849		)	(869		)
Net income	$	58,267		$	58,559		$	33,616		$	25,912		$	36,433
Less net income attributable to noncontrolling interests	(1,511		)	—			—			—			—
Net income attributable to Primoris	$	56,756		$	58,559		$	33,616		$	25,912		$	36,433
Dividends per common share	$	0.12		$	0.11		$	0.10		$	0.10		$	0.05
Earnings (loss) per share:
Basic:
Income from continuing operations	$	1.12		$	1.15		$	0.79		$	0.93		$	1.42
Income (loss) from discontinued operations —(1)	$	—		$	—		$	—		$	(0.12	)	$	(0.03	)
Net income	$	1.12		$	1.15		$	0.79		$	0.81		$	1.39
Net income attributable to noncontrolling interests	$	(0.02	)	$	—		$	—		$	—		$	—
Net income attributable to Primoris	$	1.10		$	1.15		$	0.79		$	0.81		$	1.39
Diluted:
Income from continuing operations	$	1.12		$	1.14		$	0.72		$	0.86		$	1.32
Income (loss) from discontinued operations —(1)	$	—		$	—		$	—		$	(0.11	)	$	(0.03	)
Net income	$	1.12		$	1.14		$	0.72		$	0.75		$	1.29
Net income attributable to noncontrolling interests	$	(0.02	)	$	—		$	—		$	—		$	—
Net income attributable to Primoris	$	1.10		$	1.14		$	0.72		$	0.75		$	1.29
Weighted average common shares outstanding:
Basic	51,391			50,707			42,694			31,937			26,258
Diluted	51,406			51,153			46,878			34,418			28,156
Pro Forma Data - 2008 (unaudited)—(2)
Income from continuing operations, before income taxes, as reported													$	42,228
Pro forma provision for income taxes													(16,797		)
Pro forma income from continuing operations													$	25,431
Pro forma income (loss) from discontinued operations — (1)													(592		)
Pro forma net income													$	24,839
Pro Forma Earnings (loss) per share (unaudited):
Basic:
Income from continuing operations													$	0.97
Income (loss) from discontinued operations — (1)													$	(0.02	)
Net income													$	0.95
Diluted:
Income from continuing operations													$	0.90
Income (loss) from discontinued operations — (1)													$	(0.02	)
Net income													$	0.88

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	As of December 31,
	2012		2011		2010		2009		2008
Balance Sheet Data:
Cash and cash equivalents	$	157,551	$	120,306	$	115,437	$	90,004	$	72,848
Short term investments	$	3,441	$	23,000	$	26,000	$	30,058	$	15,036
Accounts receivable, net	$	268,095	$	187,378	$	208,145	$	108,492	$	90,622
Total assets	$	931,207	$	728,413	$	704,216	$	476,027	$	252,212
Total current liabilities	$	420,669	$	345,019	$	381,587	$	242,192	$	168,392
Long-term debt/capital leases, net of current portion	$	132,198	$	67,233	$	73,160	$	77,955	$	26,965
Stockholders’ equity	$	332,638	$	274,932	$	208,231	$	143,959	$	55,430

(1)During December 2009, a plan was put in place to sell the stock ownership of the Company in Ecuador and to discontinue all operations in Ecuador.  The results of operations and cash flows for these operations are reflected as discontinued operations for all periods presented.

(2)Prior to the merger with Rhapsody in July 2008, Former Primoris was taxed as an S-Corporation for purposes of federal and state income taxes. As a result of the merger, the S-Corporation status terminated and the combined entity has been taxed as a C-Corporation under federal and state tax laws. The pro forma data reflects the impact of combined federal and state income taxes as if both Former Primoris and we had been taxed as a C-Corporation during those periods using an effective tax rate of 39.8%.

ITEM 7.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion of our financial condition and results of operations in conjunction with the financial statements and the notes to those statements included as item 8 in this Annual Report on Form 10-K. This discussion may contain forward-looking statements based upon current expectations that involve risks and uncertainties. See “Forward Looking Statements” at the beginning of this Annual Report on Form 10-K. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including certain risks inherent with our business as discussed in “Item 1A Risk Factors”.

The following discussion starts with an overview of our business and our financial results followed by a discussion of material trends and uncertainties.  Next we provide an overview of our revenues and costs followed by a summary of our critical accounting policies and estimates.  Finally we provide an analysis of the results of our operations, financial condition, liquidity and capital resources.

Business Overview

Primoris is a holding company of various subsidiaries, which form one of the largest publicly traded specialty contractors and infrastructure companies in the United States.  Serving diverse end-markets, Primoris provides a wide range of construction, fabrication, maintenance, replacement, water and wastewater, and engineering services to major public utilities, petrochemical companies, energy companies, municipalities, state departments of transportation and other customers. With our acquisitions of JCG in 2009, Rockford in 2010 and four additional acquisitions in 2012, Primoris has more than tripled its size in revenues since 2009.  The Company’s national footprint now extends nearly nationwide and in to Canada.

We install, replace, repair and rehabilitate natural gas, refined product, water and wastewater pipeline systems, large diameter gas and liquid pipeline facilities, heavy civil projects, earthwork and site development and also construct mechanical facilities and other structures, including power plants, petrochemical facilities, refineries and parking structures. In addition, we provide maintenance services, including inspection, overhaul and emergency repair services, to cogeneration plants, refineries and similar mechanical facilities. Through our subsidiary OnQuest, Inc., we provide engineering and design services for fired heaters and furnaces primarily used in refinery applications. Through our subsidiary Cardinal Contractors, Inc., we construct water and wastewater facilities in Florida and Texas.

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Our service capabilities and geographic footprint have expanded through the following acquisitions.

First, on December 18, 2009, we acquired James Construction Group, LLC, a privately-held Florida limited liability company (“JCG”).  JCG is one of the largest general contractors based in the Gulf Coast states and is engaged in highway, industrial and environmental construction, primarily in Louisiana, Texas and Florida.  JCG is the successor company to T. L. James and Company, Inc., a Louisiana company that has been in business for over 80 years.  Headquartered in Baton Rouge, Louisiana, JCG serves government and private clients in a broad geographical region that includes the entire Gulf Coast region of the United States.

Second, on November 8, 2010, the Company entered into an agreement (the “Rockford Agreement”) to acquire privately-held Rockford Corporation (“Rockford”).  Upon completion of the transaction on November 12, 2010, Rockford became a wholly owned subsidiary.  Based in Hillsboro (Portland), Oregon, Rockford specializes in construction of large diameter natural gas and liquid pipeline projects and related facilities.

And third, during 2012, we made four acquisitions:

1.On March 12, 2012, we purchased certain assets of Sprint Pipeline Services, L.P. (“Sprint”), headquartered in Pearland (outside Houston), Texas.  Sprint provides a comprehensive range of pipeline construction, maintenance, upgrade, fabrication and specialty services primarily in the southeastern United States.

2.On May 30, 2012, we purchased certain assets of Silva Contracting Company, Inc., Tarmac Materials, LLC and C3 Interest, LLC (collectively, “Silva”).  Based outside of Houston, Texas, Silva provides transportation infrastructure maintenance, asphalt paving, and material sales in the Gulf Coast region of the United States.  Following this acquisition, Silva was merged with the operations of JCG.

3.On September 28, 2012, we purchased certain assets of The Saxon Group, Inc. (“Saxon”).  Based in Suwannee, Georgia, outside Atlanta, Saxon is a full service industrial construction enterprise with special expertise in the industrial gas processing and power plant sectors.

4.On November 17, 2012, we purchased all of the issued and outstanding shares of stock of Q3C Contracting, Inc., a privately-held Minnesota corporation (“Q3C”).  The sellers elected to treat the acquisition as an asset purchase under Section 338(h)(10) of the Internal Revenue Code.  Based in Little Canada, Minnesota, north of St. Paul, Minnesota, Q3C specializes in small diameter pipeline and gas distribution construction, restoration and other services, primarily in the upper Midwest region of the United States.

The Company segregates the business into three operating segments:  the East Construction Services segment, the West Construction Services segment and the Engineering segment.

Range of Services — East and West Construction Services

Both the East Construction Services and the West Construction Services segments specialize in a range of services that include designing, building/installing, replacing, repairing/rehabilitating and providing management services for construction related projects. Our services include:

·Providing installation of underground pipeline, cable and conduits for entities in the petroleum, petrochemical and water industries;

·Providing installation and maintenance of industrial facilities for entities in the petroleum, petrochemical and water industries;

·Providing installation of complex commercial and industrial cast-in-place structures; and

·Providing construction of highways and industrial and environmental construction.

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East Construction Services

The East Construction Services segment consists of business located primarily in the southeastern United States and along the Gulf Coast.  The segment includes the JCG heavy civil, industrial and infrastructure and maintenance operations headquartered in Baton Rouge, Louisiana; water and wastewater construction operations of Cardinal Contractors, Inc. located in Sarasota, Florida; and the operations of Sprint, Silva and Saxon.

West Construction Services

The West Construction Services segment consists of businesses located primarily in the western United States.  The segment includes the underground and industrial operations of ARB, Inc., headquartered in Lake Forest, California; the operations of Rockford, which while headquartered in Hillsboro, Oregon, performs its major capital underground work throughout the United States; the operations of ARB Structures, Inc., Alaska Continental Pipeline, Inc., All Day Electric Company, Inc. (100% owned in 2011 and 50% in prior years), Stellaris, LLC, Primoris Renewables, Inc. and Juniper Rock, Inc.  The segment also includes the operations of the Blythe Power Constructors joint venture and Q3 Contracting, Inc.

Engineering

The Engineering segment includes the results of Onquest, Inc. and Born Heaters Canada, ULC.  The Engineering group specializes in designing, supplying, and installing high-performance furnaces, heaters, burner management systems, and related combustion and process technologies for clients in the oil refining, petrochemical, and power generation industries. It furnishes turnkey project management with technical expertise and the ability to deliver custom engineering solutions worldwide.

Material trends and uncertainties

We generate our revenue from both large and small construction and engineering projects. The award of these contracts is dependent on a number of factors, many of which are not within our control. Business in the construction industry is cyclical. We depend in part on spending by companies in the energy and oil and gas industries, the gas utility industry, as well as municipal water and wastewater customers. Over the past several years, each segment has benefited from demand for more efficient and more environmentally friendly energy and power facilities, local highway and bridge needs and from the strength of the oil and gas industry; however, each of these industries and the government agencies periodically are adversely affected by macroeconomic conditions. Economic factors outside of our control may affect the amount and size of contracts we are awarded in any particular period.

We and our customers are operating in a challenging business environment in light of the economic downturn and uncertain capital markets. We are closely monitoring our customers and the effect that changes in economic, market and regulatory conditions may have on them. We have experienced reduced spending by some of our customers over the last several years, which we attribute to negative economic and market conditions, and we anticipate that these negative conditions may continue to affect demand for our services in the near-term.  Fluctuations in market prices, both oil, gas and other fuel sources can affect demand for our services.  However, we believe that most of our customers, some of whom are regulated utilities, remain financially stable in general and will be able to continue with their business plans over the long-term period.

Seasonality and cyclicality

Primoris’ results of operations are subject to quarterly variations. Some of the variation is the result of weather, particularly rain and snow, which can impact Primoris’ ability to perform construction services. While the majority of the Company’s work is in the southern half of the United States, these seasonal impacts affect revenues and profitability since gas and other utilities defer routine replacement and repair during their period of peak demand.  In addition, demand for new projects tends to be lower during the early part of the year due to clients’ internal budget cycles.  As a result, the Company usually experiences higher revenues and earnings in the third and fourth quarters of the year as compared to the first two quarters.

The Company is also dependent on large construction projects which tend not to be seasonal, but can fluctuate from year to year based on general economic conditions.  Because of the cyclical nature of its business, the financial results for any period may fluctuate from prior periods, and the Company’s financial condition and operating results may vary from quarter-to-quarter.  Results from one quarter may not be indicative of its financial condition or operating results for any other quarter or for an entire year.

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2013 Outlook

We believe that we have market opportunities in 2013 in the following areas:

·Construction of petroleum and natural gas and natural gas liquid pipelines — We expect that production from the shale formations will continue to increase and that the current disconnect between production and processing locations provides opportunities for our underground construction operations, primarily Rockford and Sprint.

·Inspection and replacement of utility infrastructure — We expect that continuing safety enhancements to the gas utility infrastructure will provide opportunities for our ARB Underground operations.  We also expect that ongoing gas utility repair and maintenance opportunities will benefit Q3C and Sprint.

·Construction of natural gas-fired power plants and heavy industrial plants — We expect continued construction opportunities for both base-load and peaker power plants.  In addition, the current low price of natural gas could result in the conversion of coal-fired power plants and conversion and expansion at chemical plants and industrial facilities.  These opportunities would benefit our ARB industrial group, JCG industrial group and Saxon.

·Construction of alternative energy facilities — We anticipate continued construction opportunities as state governments remain committed to renewable power standards, primarily benefitting ARB industrial.

·Transportation infrastructure construction opportunities — We believe that this market has seen a decrease in new contract opportunities in most of the United States, including in the Louisiana market.  However, we expect a potential increase in Texas, as the 2013 budget for highway construction, reconstruction and system maintenance is expected to increase by 20% over the 2012 budget.  The transportation market would primarily impact the operations of JCG.

Please note that our 2013 outlook and 2013 financial results could be adversely impacted by the factors discussed in Item 1A “Risk Factors” in this annual report on Form 10-K.  This 2013 outlook consists of forward-looking statements.

Critical Accounting Policies and Estimates

General—The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements and also affect the amounts of revenues and expenses reported for each period. These estimates and assumptions must be made because certain information that is used in the preparation of our financial statements cannot be calculated with a high degree of precision from data available, is dependent on future events, or is not capable of being readily calculated based on generally accepted methodologies. Often, these estimates are particularly difficult to determine and we must exercise significant judgment. Estimates may be used in our assessments of revenue recognition under percentage-of-completion accounting, the allowance for doubtful accounts, useful lives of property and equipment, fair value assumptions in analyzing goodwill and long-lived asset impairments, self-insured claims liabilities and deferred income taxes. Actual results could differ from those that result from using the estimates under different assumptions or conditions.

An accounting policy is deemed to be critical if it requires an accounting estimate to be based on assumptions about matters that are highly uncertain at the time the estimate is made, and different estimates that reasonably could have been used, or changes in the accounting estimates that are reasonably likely to occur periodically, could materially impact our consolidated financial statements.

The following accounting policies are based on, among other things, judgments and assumptions made by management that include inherent risks and uncertainties. Management’s estimates are based on the relevant information available at the end of each period.

We periodically review these accounting policies with the Audit Committee of the Board of Directors.

Revenue recognition—Historically, substantial portions of the Company’s revenues have been generated under fixed-price contracts. Fixed-price contracts carry certain inherent risks, including underestimation of costs, problems with new technologies and economic and other changes that may occur over the contract period. The Company recognizes revenues using the percentage-of-completion method for fixed-price contracts, which may result in uneven and irregular results. Unforeseen events and circumstances can alter the estimate of the costs and potential profit associated with a particular contract. To the extent that original cost estimates are modified, estimated costs to complete increase, delivery schedules are delayed, or progress under a contract is otherwise impeded, cash flow, revenue recognition and profitability from a particular contract may be adversely affected.

Revenue is recognized on the cost-to-total-cost percentage-of-completion method for fixed price contracts.  In the percentage-of-completion method, estimated revenues and resulting contract income is calculated based on the total costs incurred to date as a percentage of total estimated costs. Total estimated costs, and thus contract revenues and income, can be impacted by changes in any of the following:  productivity, scheduling, the unit cost of labor, subcontracts, materials and equipment. Additionally, external factors such as weather, client needs, client delays in providing permits and approvals, labor availability, governmental regulation and politics may affect the progress of a project’s completion and thus the timing of revenue recognition. If an estimate of total contract cost indicates a loss on a contract, the projected loss is recognized in full at the time of the estimate.

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Other contract forms—In addition, the Company also uses unit-price, time and material, and cost reimbursable plus fee contracts.  For these jobs, revenue is recognized based on contractual terms.  For example, time and material contract revenues are recognized based on purchasing and employee time records.  Similarly, unit price contracts recognize revenue based on accomplishment of specific units at a specified unit price.

For all of its contracts, the Company includes the provision for estimated losses on uncompleted contracts in accrued expenses. The provision for estimated losses on uncompleted contracts was $764 and $917 for the years ended December 31, 2012 and 2011, respectively. Changes in job performance, job conditions and estimated profitability, including those arising from final contract settlements, may result in revisions to costs and income. These revisions are recognized in the period in which the revisions are determined. Claims are included in revenues when realization is probable and amounts can be reliably determined. Revenues in excess of contract costs incurred on claims are recognized only when the amounts have been paid.

The caption “Costs and estimated earnings in excess of billings” represents unbilled receivables which arise when revenues have been recorded but the amount cannot be billed under the terms of the contract until a later date.  Balances may represent:  (a) unbilled amounts arising from the use of the percentage-of-completion method of accounting, (b) incurred costs to be billed under cost reimbursement type contracts, or (c) amounts arising from routine lags in billing.  For those contracts in which billings exceed contract revenues recognized to date, excesses are included in the caption “Billings in excess of costs and estimated earnings”.

The Company considers unapproved change orders to be contract variations for which Primoris has customer approval for a scope change but a price change associated with the scope change has not yet been agreed upon.  Costs associated with unapproved change orders are included in the estimated cost to complete the contracts and are treated as project costs as incurred. The Company recognizes revenue equal to costs incurred on unapproved change orders when realization of price approval is probable and the estimated revenue amount is equal to or greater than the costs related to the unapproved change order. Unapproved change orders involve the use of estimates, and it is reasonably possible that revisions to the estimated costs and recoverable amounts may be required in future reporting periods to reflect changes in estimates or final agreements with customers.

The Company considers claims to be amounts Primoris seeks, or will seek, to collect from customers or others for customer-caused changes in contract specifications or design, or other customer-related causes of unanticipated additional contract costs on which there is no agreement with customers on both scope and price changes. Revenue from claims is recognized when agreement is reached with customers as to the value of the claims, which in some instances may not occur until after completion of work under the contract. Costs associated with claims are included in the estimated costs to complete the contracts and are treated as project costs when incurred.

In accordance with applicable terms of construction contracts, certain retainage amounts may be withheld by customers until completion and acceptance of the project.  Final payments of the majority of retainage may not be made until the following operating cycle.

Income taxes—We account for income taxes under the asset and liability method as set forth in ASC Topic 740 “Income Taxes”, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on the temporary differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.

Deferred income tax assets may be reduced by a valuation allowance if, in the judgment of our management, it is more likely than not that all or a portion of a deferred tax asset will not be realized. In making such determination, we consider all available evidence, including recent financial operations, projected future taxable income, scheduled reversals of deferred tax liabilities, tax planning strategies, and the length of tax asset carryforward periods. The realization of deferred tax assets is primarily dependent upon our ability to generate sufficient future taxable earnings in certain jurisdictions. If we subsequently determine that the carrying value of these assets, which had been written down, would be realized in the future, the value of the deferred tax assets would be increased, thereby increasing net income in the period when that determination was made.

A tax position is recognized as a benefit only if it is more likely than not that the tax position would be sustained based on its technical merits in a tax examination, using the presumption the tax authority has fully knowledge of all relevant facts regarding the position.  The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on ultimate settlement with the tax authority.  For tax position not meeting the more likely than not test, no tax benefit is recorded.

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Valuation of acquired businesses—We use the fair value of the consideration paid and the fair value of the assets acquired and liabilities assumed to account for the purchase price of businesses.  The determination of fair value requires estimates and judgments of future cash flow expectations for the assignment of the fair values to the identifiable tangible and intangible assets.

Identifiable Tangible Assets.  Significant identifiable tangible assets acquired would include accounts receivable, costs and earnings in excess of billings for projects, inventory and fixed assets, generally consisting of construction equipment, for each acquisition. We determine the fair value of these assets on the acquisition date.  For current assets and current liabilities of an acquisition, the Company will evaluate whether the book value is equivalent to fair value due to their short term nature.  We estimate the fair value of fixed assets using a market approach, based on comparable market values for similar equipment of similar condition and age.

Identifiable Intangible Assets.  When necessary, we use the assistance of an independent third party valuation specialist to determine the fair value of the intangible assets acquired for the acquisitions.

A liability for contingent consideration based on future earnings is estimated at it’s fair value at the date of acquisition, with subsequent changes in fair value recorded in earnings as a gain or loss.  Fair value is estimated as of the acquisition date using estimated earnout payments based on management’s best estimate.

Accounting principles generally accepted in the United States (“ GAAP”) provides a “measurement period” of up to one year in which to finalize all fair value estimates associated with the acquisition of a business.  Most estimates are preliminary until the end of the measurement period.  During the measurement period, adjustments to initial valuations and estimates that reflect newly discovered information that existed at the acquisition date are recorded.  After the measurement date, any adjustments would be recorded as a current period gain or loss.

Goodwill—Goodwill is assessed for impairment annually and more frequently if triggering events occur. In performing these assessments, management relies on various factors, including operating results, business plans, economic projections, anticipated future cash flows, comparable transactions and other market data. There are inherent uncertainties related to these factors and judgment in applying them to the analysis of goodwill for impairment. Since judgment is involved in performing fair value measurements used in goodwill impairment analyses, there is risk that the carrying values of our goodwill may not be properly stated.

We account for goodwill, including evaluation of any goodwill impairment under ASC Topic 350 “Intangibles — Goodwill and Other”, performed at the reporting unit level for those units with recorded goodwill on October 1 of each year, unless there are indications requiring a more frequent impairment test.

To date, goodwill has arisen from acquisitions and is recorded at our reporting units as follows:

·James Construction Group, East Construction Services segment, $59,259;

·Rockford, West Construction Services segment, $32,079;

·Q3C Contracting, Inc., West Construction Services segment, $12,536;

·Sprint (a subsidiary of Primoris Energy Services Corporation (“PES”)), East Construction Services segment, $9,389;

·Born Canada, Engineering segment, $2,441;

·The Saxon Group (a subsidiary of PES), East Construction Services segment, $810; and

·Cardinal Contractors, East Construction Services segment, $401.

Using the two-step impairment test, the company tests for goodwill impairment on October 1 each year.  First, we compare the fair value of a reporting unit with its carrying amount. Fair value for the goodwill impairment test is determined utilizing a discounted cash flow analysis based on our budgets discounted using our weighted average cost of capital and market indicators of terminal year cash flows. Other valuation methods may be used to corroborate the discounted cash flow method. If the carrying amount of a reporting unit is in excess of its fair value, goodwill is considered potentially impaired and further tests are performed to measure the amount of impairment loss. In the second step of the goodwill impairment test, we compare the implied fair value of reporting unit goodwill with the carrying amount of the reporting unit’s goodwill. If the carrying amount of the reporting unit’s goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to the carrying amount of goodwill over its implied fair value. The implied fair value of goodwill is determined in the same manner that the amount of goodwill recognized in a business combination is determined. We allocate the fair value of a reporting unit to all of the assets and liabilities of that unit, including intangible assets, as if the reporting unit had been acquired in a business combination. Any excess of the fair value of a reporting unit over the amounts assigned to its assets and liabilities represents the implied fair value of goodwill.

Disruptions to our business, such as end market conditions, protracted economic weakness, unexpected significant declines in operating results of reporting units and the divestiture of a significant component of a reporting unit may result in our having to perform a goodwill impairment first step valuation analysis for some or all of our reporting units prior to the required annual assessment. These types of events and the resulting analysis could result in goodwill impairment charges in any periods in the future.

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In September 2011, the FASB issued ASU 2011-08 Intangibles - Goodwill and Other (Topic 350): Testing Goodwill or Impairment (“ASU 2011-08”).  ASU 2011-08 provides an option to assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount.  If an entity determines that the fair value is not less than its carrying amount, then it is not necessary to perform the two-step impairment test.  An entity can choose to perform the qualitative assessment on non, some or all of its reporting units.  An entity can also bypass the qualitative assessment for any reporting unit in any period and proceed directly to step one of the impairment test, and then resume performing the qualitative assessment in any subsequent period.  ASU 2011-08 also includes new qualitative indicators that replace those currently used to determine whether an interim goodwill impairment test is required to be performed.  The Company adopted this standard on January 1, 2012, which did not have a material impact on the Company’s consolidated financial position, results of operations or cash flows.

In July 2012, the FASB issued ASU 2012-02, Intangibles — Goodwill and Other (Topic 350):  Testing Indefinite-Lived Intangible Assets for Impairment (“ASU 2012-02”).  ASU 2012-02 allows an organization the option of first assessing qualitative factors to determine if a quantitative impairment test of the indefinite-lived intangible asset is necessary.  If the qualitative assessment reveals that it is “more likely than not” that the asset is impaired, a calculation of the asset’s fair value is required.  Otherwise, no quantitative calculation, as outlined in Subtopic 350-30 is necessary.  The Company adopted this standard on October 1, 2012, the date of the Company’s impairment review.  The adoption of ASU 2012-02 did not have a material impact on the Company’s financial position, results of operations or cash flows.

Long-Lived Assets—Assets held and used by the Company, primarily property, plant and equipment, are reviewed for impairment whenever events or changes in business circumstances indicate that the carrying amount of the asset may not be fully recoverable. We perform an undiscounted operation cash flow analysis to determine if impairment exists. For purposes of recognition and measurement of an impairment for assets held for use, we group assets and liabilities at the lowest level for which cash flows are separately identified. If an impairment is determined to exist, any related impairment loss is calculated based on fair value. The calculation of the fair value of long-lived assets is based on assumptions concerning the amount and timing of estimated future cash flows and assumed discount rates, reflecting varying degrees of perceived risk. Since judgment is involved in determining the fair value and useful lives of long-lived assets, there is a risk that the carrying value of our long-lived assets may be overstated or understated.

Reserve for uninsured risks—Estimates are inherent in the assessment of our exposure to uninsured risks. Significant judgments by us and where possible, third-party experts are needed in determining probable and/or reasonably estimable amounts that should be recorded or disclosed in the financial statements. The results of any changes in accounting estimates are reflected in the financial statements of the period in which we determine we need to record a change.

We self-insure worker’s compensation claims up to $250,000 per claim.  We maintained a self-insurance reserve totaling approximately $16.5 million at December 31, 2012 and approximately $13.8 million at December 31, 2011. Claims administration expenses were charged to current operations as incurred.  Our accruals are based on judgment, the probability of losses, and where applicable, the consideration of opinions of internal and/or external legal counsel. The amount is included in “accrued expenses and other current liabilities” on our balance sheets. Actual payments that may be made in the future could materially differ from such reserves.

Litigation and contingencies—Litigation and contingencies are included in our consolidated financial statements based on our assessment of the expected outcome of litigation proceedings or the expected resolution of the contingency.  We may not be able to ascertain the ultimate outcome of the litigation or contingencies, but after a review and consultation with counsel and taking into consideration relevant insurance coverage and related deductibles, we accrue a liability for an estimated loss if the potential loss is considered probable and the amount can be reasonably estimated.  Significant judgment is required to make these estimates and due to uncertainties related to these matters, accruals are based on the information available at that time.  As additional information becomes available, we may revise our estimates.  These revisions could have a material impact on our results of operations and financial condition.

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Results of Operations

Revenue, gross profit, operating income and net income for the years ended December 31, 2012, 2011 and 2010 were as follows:

	2012					2011					2010
	(Thousands)			% of Revenue		(Thousands)			% of Revenue		(Thousands)			% of Revenue
Revenues	$	1,541,734		100.0	%	$	1,460,150		100.0	%	$	941,765		100.0	%
Gross profit	192,710			12.5	%	185,203			12.7	%	122,789			13.0	%
Selling, general and administrative expense	96,424			6.3	%	86,204			5.9	%	64,985			6.9	%
Operating income	96,286			6.2	%	98,999			6.8	%	57,804			6.1	%
Other income (expense)	(4,182		)	(0.3	)%	(2,266		)	(0.2	)%	(2,129		)	(0.2	)%
Income before income taxes	92,104			6.0	%	96,733			6.6	%	55,675			5.9	%
Provision for income taxes	(33,837		)	(2.2	)%	(38,174		)	(2.6	)%	(22,059		)	(2.3	)%
Net income	58,267			3.8	%	58,559			4.0	%	33,616			3.6	%
Net income attributable to noncontrolling interests	(1,511		)	(0.1	)	—			—		—			—
Net income to Primoris	$	56,756		3.7	%	$	58,559		4.0	%	$	33,616		3.6	%

2012 and 2011

Revenue in 2012 grew to $1.5 billion, an increase of $81 million, or 5.6% from the prior year. The 2012 acquisitions contributed $113 million, or 7.3% of the total 2012 revenues.  The decline in organic revenues of $32 million reflects the impact of the El Paso Ruby contract on 2011 revenues.  With the substantial completion of that pipeline in 2011, revenues associated with the project decreased $262 million from 2011 to 2012.  Excluding the impact of Ruby, organic revenues grew by $230 million reflecting growth at ARB, JCG and Rockford’s non-Ruby business.

Gross profit for 2012 increased by $7.5 million, or 4.1%, from 2011.  The 2012 acquisitions contributed gross profit of $17 million.  Excluding the impact of the Ruby project, gross profit from organic operations, increased by $28 million compared to the previous year.  As a percentage of revenue, gross profit decreased to 12.5% from 12.7%, reflecting the impact of the end of the Ruby project.

An overall increase in selling, general and administrative expenses (“SG&A”) of $10 million, was due primarily to additional expenses at the acquired companies.  Operating income decreased by $2.7 million from 2011 primarily as a result of the decrease in the gross profit percentage.  Income from non-consolidated entities decreased by $4 million primarily due to the completion of the St.-Bernard Levee joint venture project.

2011 and 2010

Revenue increased by $518.4 million, or 55.0%, in 2011 compared to 2010 with acquisitive and organic growth.  Revenues at Rockford, acquired in November 2010, increased by $267.8 million, or 314%, from 2010, mainly from the Ruby project for the construction of a natural gas pipeline from Wyoming to Oregon.  The project was substantially completed at the end of September 2011.  Organically, revenues at the West Construction segment increased by $211.7 million, or 66.8%, revenues at the East Construction segment increased by $48.2 million, or 10%, and revenues decreased at the Engineering segment by $9.3 million, or 15.8%, all compared to 2010.  In 2011, the East Construction services segment represented 36.2% of total revenues, the West Construction segment represented 60.4% of total revenues and the Engineering segment represented 3.4% of total revenues.  In 2010, the East Construction services segment represented 51.0% of total revenues, the West Construction segment represented 42.7% of total revenues and the Engineering segment represented 6.3% of total revenues.

Gross profit increased by $62.4 million, or 50.8%, in 2011 compared with 2010.  Rockford gross profit increased by $37.0 million, or 378%, gross profit at the West Construction services segment, excluding Rockford, increased by $19.5 million, or 37.4%, gross profit at the East Construction services increased by $8.3 million, or 17.0%, and gross profit at the engineering segment decreased by $2.4 million, or 20.0%, all compared to 2010.  In 2011, the East Construction services gross profit represented 30.8% of total gross profit, the West Construction services gross profit represented 64.0% of the gross profit, and the Engineering segment represented 5.2% of gross profit.   In 2010, the East Construction services gross profit represented 39.7% of total gross profit, the West Construction services gross profit represented 50.4% of the gross profit, and the Engineering segment represented 9.9% of gross profit.

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Gross profit as a percentage of revenues declined from 13.0% to 12.7% comparing 2011 to 2010.  The gross profit margin percentage for the East Construction services segment increased to 10.8% from 10.1% in 2010, the gross profit margin percentage for the West Construction services segment declined from 15.4% in 2010 to 13.4 %, and the gross profit margin percentage for the engineering segment declined from 20.6% in 2010 to 19.5%.

Geographic areas — financial information

Revenue by geographic area for the years ended December 31, 2012, 2011 and 2010 was as follows:

	2012				2011				2010
	(Thousands)		% of Revenue		(Thousands)		% of Revenue		(Thousands)		% of Revenue
Country:
United States	$	1,530,819	99.3	%	$	1,447,653	99.2	%	$	920,051	97.7	%
Non-United States	10,915		0.7	%	12,287		0.8	%	21,714		2.3	%
Total revenue	$	1,541,734	100.0	%	$	1,460,150	100.0	%	$	941,765	100.0	%

All non-United States revenue has been generated in the Engineering Segment.  For the table above, we use revenues generated by OnQuest’s Canadian subsidiary, Born Heaters Canada, ULC, to estimate non-United States revenues.  Much of that work was done in the Far East and Australia.

Segment Results

The following discussion describes the significant factors contributing to the results of our three operating segments.

East Construction Services Segment

Revenue and gross profit for the East Construction Services segment for the years ending December 31, 2012, 2011 and 2010 were as follows:

	2012				2011				2010
	(Thousands)		% of Revenue		(Thousands)		% of Revenue		(Thousands)		% of Revenue
East Construction Services
Revenue	$	662,248			$	528,745			$	480,533
Gross profit	$	63,811	9.6	%	$	57,118	10.8	%	$	48,770	10.1	%

2012 and 2011

East Construction services segment revenue in 2012 increased by $133.5 million, or 25.2%, from 2011.  Of the revenue increase, $100.7 million was due to the contribution of the three acquired companies, Sprint, Silva and Saxon.  JCG revenues increased by $29.0 million compared to 2011, as revenue increased at our industrial, infrastructure and maintenance and deep tunneling divisions.  Revenues at the heavy civil division were impacted by a decrease of $62.3 million in work for LADOT and was offset by increases in work for TXDOT.

Gross profit increased by $6.7 million, or 11.7%, compared to 2011.  Gross profit contribution from the 2012 acquisitions was $15.7 million.  JCG gross profit decreased by $6.7 million with increases at the industrial, infrastructure and maintenance and deep tunneling divisions partially offsetting a $6.6 million decrease at the heavy civil division.  The heavy civil division decrease was primarily attributable to the reduction in LADOT revenues and the lower profit margins associated with the startup projects in Belton, Texas area.  Over time, we expect the Texas gross profit to increase to historical heavy civil levels.

The reduction of gross profit percentage from 10.8% of revenues to 9.6% of revenues was primarily as a result of the reduced revenues and gross profit for the JCG heavy civil division.

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2011 and 2010

East Construction Services segment revenue in 2011 increased by $48.2 million, or 10.0%, from 2010.  The revenue increases occurred primarily in the JCG heavy civil group where revenue increased by $75.5 million from continued work on large highway construction projects for state agencies in Louisiana and Texas compared to 2010. This increase was offset by a reduction of $18.6 million in the JCG Industrial group attributable to temporary slowdowns in construction activity within the petrochemical sector along the Gulf Coast.

Gross profit increased by $8.3 million, or 17.0%, in 2011 compared to 2010.  The increase resulted from increased gross profit contributed by the JCG heavy civil group of $9.7 million primarily resulting from improved efficiency on a large causeway project in South Louisiana.

West Construction Services Segment

Revenue and gross profit for the West Construction Services segment for the years ending December 31, 2012, 2011 and 2010 were as follows:

	2012				2011				2010
	(Thousands)		% of Revenue		(Thousands)		% of Revenue		(Thousands)		% of Revenue
West Construction Services
Revenue	$	832,860			$	881,733			$	402,273
Gross profit	$	119,328	14.3	%	$	118,385	13.4	%	$	61,897	15.4	%

2012 and 2011

West Construction Services segment revenues decreased by $48.9 million, or 5.5% for 2012 compared to 2011 primarily due to a decline in revenue at Rockford from the completion of the Ruby project in 2011.  The decline in revenues was partially offset by revenue increases as follows:  At ARB underground division of $78.4 million, ARB industrial division of $29.6 million and Rockford (excluding Ruby) of $73.7 million.  In addition, the Blythe Power Constructors joint ventures contributed revenues $25.7 million and the acquisition of Q3C added $12.8 million.  Revenues for the West Construction Services segment’s largest customer increased to $224.8 million from $165.4 million for the previous year.

Gross profit for the West Construction Services increased by $0.9 million, or 0.8%, for 2012 compared to 2011.  The small increase was primarily the result of a combination of a reduction due to the completion of the Ruby project and the Long Beach airport parking facility, totaling $45.4 million, offset by increases in gross profit as follows:  ARB’s underground division of $17.3 million, ARB’s industrial division of $7.7 million, Rockford excluding Ruby of $18.0 million, Blythe Power Constructors of $3.0 million and Q3C of $1.4 million.  The gross profit at ARB’s industrial division primarily reflects final completion of two power projects, while the ARB underground division reflects primarily the increased gross profit from its largest customer.

Gross profit as a percent of revenues increased to 14.3% in 2012 compared to 13.4% in 2011 primarily as a result of increases in revenues and gross profit at the two ARB divisions in 2012, compared to 2011.

2011 and 2010

West Construction Services segment revenues increased by $479.5 million, or 119.2%, for 2011 compared to 2010 primarily due to the $267.8 million revenue increase contributed by the November 2010 Rockford acquisition.  Additionally, revenues increased in 2011 by $122.0 million from California pipeline projects, $28.7 million from cable and conduit projects, and $59.5 million from industrial power plant projects.

Gross profit for the West Construction Services increased by $56.5 million, or 91.3%, for 2011 compared to 2010.  Rockford contributed increased gross profit of $37.0 million, pipeline projects increased by $12.1 million, cable and conduit work increased by $0.8 million and parking structures increased by $4.4 million.  These increases were partially offset by a decreasing profit in the California Industrial group of $2.4 million.  In the initial phases of major construction projects, gross margins tend to be lower since we recognize a contingency in each phase of the project.  In the second quarter of 2011, we determined that because of delays associated with the engineering of a power plant construction project, we would increase contingency amounts, thereby reducing the margins and margin percentage for the project.  The issues were not fully resolved at the end of 2011 and the margin for the segment and the gross profit percentage were adversely affected.

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Gross profit as a percent of revenues decreased to 13.4% in 2011 compared to 15.4% in 2010 primarily as a result of increased master service agreements (“MSAs”) and cost plus work, primarily remediation projects in California which reflect less risk, but with a lower profit contribution.  Additionally, decreased margins in 2011 were impacted by the completion of higher margin projects during 2010.

Engineering Segment

Revenue and gross profit for the Engineering segment for the years ended December 31, 2012, 2011 and 2010 were as follows:

	2012				2011				2010
	(Thousands)		% of Revenue		(Thousands)		% of Revenue		(Thousands)		% of Revenue
Engineering Segment
Revenue	$	46,626			$	49,672			$	58,959
Gross profit	$	9,571	20.5	%	$	9,700	19.5	%	$	12,122	20.6	%

2012 and 2011

Engineering segment revenue in 2012 decreased by $3.0, or 6.1%, compared to the previous year, due to a lower order activity across the operation.

Gross profit for the Engineering segment for 2012 decreased to $9.6 million, or a decrease of 1.3%, from $9.7 million for the same period in 2011, primarily due to the lower revenue volume.

2011 and 2010

Engineering segment revenue in 2011 decreased by $9.3 million, or 15.8%, compared to 2010, due to a lower international order activity in our Canadian operation.

Gross profit for the Engineering segment for 2011 decreased to $9.7 million from $12.1 million for the same period in 2010, a decrease of $2.4 million, primarily due to the lower revenue volume, with gross profit as a percent of revenues slightly lower than in 2010 at 19.5%.

Selling, general and administrative expenses

Selling, general and administrative expenses (“SG&A”) increased $10.2 million, or 11.9%, for 2012 compared to 2011.  The primary reason for the change is as follows:

·As a result of the acquisitions of Sprint, Saxon and Q3C, SG&A expense increased $10.1 million; and

·In 2012 the Company expensed $2.5 million for its pension withdrawal liability compared to $5 million in the prior year;

·The Company settled litigation associated with the acquisition of Rockford and recorded a benefit of $3.5 million;

·These decreased costs were partially offset by increases in personnel costs of $1.5 million, intangible amortization of $0.3 million and legal and consulting costs of $1.3 million.

SG&A expenses as a percentage of revenue increased to 6.3% for 2012 from 5.9% for 2011, and decreased to 5.9% for 2011 from 6.9% for 2010.  The increase in 2012 is primarily due to completion of the Ruby project which had minimal associated SG&A costs.

The decrease as a percentage of revenues for 2011 compared to 2010 was primarily due to the increase in revenues.

Other income and expense

Non-operating income and expense items for the years ended December 31, 2012, 2011 and 2010 were as follows:

	2012			2011			2010
	(Thousands)			(Thousands)			(Thousands)
Other income (expense)
Income from non-consolidated investments	$	186		$	4,018		$	4,630
Foreign exchange gain (loss)	(36		)	(96		)	250
Other income (expense)	(870		)	(1,088		)	(1,429		)
Interest income	157			331			616
Interest expense	(3,619		)	(5,431		)	(6,196		)
Total other income (expense)	$	(4,182	)	$	(2,266	)	$	(2,129	)

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Income from non-consolidated joint ventures for 2012 included $1.1 million from the St.-Bernard Levee Partners joint venture, offset by the write-off $0.9 million expense for the WesPac Energy joint venture, a developer of pipeline and terminal projects in which the Company acquired a 50% interest in July 2010.

The income from  non-consolidated joint ventures for 2011 included a profit of $9.4 million from the St.-Bernard Levee Partners joint venture and a profit of $0.1 million from the OMPP joint venture.  These earnings were offset by losses of $5.5 million for the WesPac Energy joint venture, including the impact for the non-reimbursed project costs for the termination of development projects and reserves for assets not recoverable and an adjustment of $1.7 million to recognize an other than temporary decrease in the value of the Company’s basis difference between the Company’s original investment and its pro-rata share of the WesPac equity.

Income from non-consolidated joint ventures for 2010 included profit of $5.4 million from the St.-Bernard Levee Partners joint venture, offset by a write-off of $0.5 million for the All Day Electric joint venture, and a $0.2 million expense for the WesPac Energy joint venture.

Foreign exchange gain for 2012, 2011 and 2010 reflect currency exchange fluctuations of the United States dollar compared to the Canadian dollar. Our contracts in Calgary, Canada are sold based on United States dollars, but a portion of the work is paid for with Canadian dollars creating a currency exchange difference.

Net other expense was $0.9 million in 2012, $1.1 million in 2011 and $1.4 million in 2010.  For 2012, net other expense consisted of (a) the increase in the estimated fair value of the contingent earn-out liabilities for the Rockford, Sprint, Saxon and Q3C acquisitions, and (b) income of $0.6 million for final settlement in December 2012 of a previously discontinued operation in Ecuador.  For both 2011 and 2010, other expense consisted primarily of the increase in the estimated fair value of the contingent earnout liabilities for the Rockford acquisition.

Interest income decreased in 2012 compared to both 2011 and 2010 as a result of declining interest rates and our decision to invest our excess cash balances primarily in certificate of deposits (“CD’s”) purchased through the CDARS (Certificate of Deposit Account Registry Service) and in short term U.S. Treasury bills with various financial institutions that are backed by the federal government FDIC program. The decrease was partially offset by higher average cash balances in the 2011 period.

Interest expense in 2012 decreased by $1.8 million compared to 2011 and decreased by $0.8 million for 2011 compared to 2010.  The $1.8 million decrease was due to paid down of all subordinated debt during 2012, and the re-financing of existing debt at lower interest rates, due the lower interest rate environment.  The $0.8 million decrease in 2011 was due to lower levels of subordinated debt and decreases in interest rates on equipment debt due to re-financing.

The weighted average interest rate on total debt outstanding at December 31, 2012, 2011 and 2010 was 2.7%, 5.6% and 5.2%, respectively.

Provision for income taxes

Our provision for income tax decreased $4.3 million to $33.8 million for 2012 compared to 2011 as a result of decreased pretax profits between the years.  The effective tax rate on income before provision for income taxes and noncontrolling interests for the year 2012 was 36.74%.  The effective tax rate excluding income attributable to noncontrolling interests is 37.35%.

Our provision for income tax increased $16.1 million to $38.2 million for 2011 compared to 2010 as a result of increased profits, including the increased contribution from the November 2010 acquisition of Rockford.  The 2011 tax rate decreased slightly for 2011 to 39.5% compared to 39.6% for 2010.

The 2010 tax rate increased over the 2009 rate of 38.1% as a result of reflecting a full year of results for our mix of revenues and profits in the various tax jurisdictions throughout the USA and Canada as a result of the JCG acquisition in December 2009.

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Liquidity and Capital Resources

Liquidity represents our ability to pay our liabilities when they become due, fund business operations and meet our contractual obligations and execute our business plan.  Our primary sources of liquidity are our cash balances at the beginning of each period and our net cash flow.  In addition to cash flow from operations, we have availability under our lines of credit to augment liquidity needs.  In order to maintain sufficient liquidity, we evaluate our working capital requirements on a regular basis.  We may elect to raise additional capital by issuing common stock, convertible notes, term debt or increasing our credit facility as necessary to fund our operations or to fund the acquisition of new businesses.

At December 31, 2012, we had cash and investments of $161.0 million, consisting of cash of $157.6 million, and $3.4 million in short-term investments.  We currently have the following three credit facilities:

A.Revolving Credit Facility

On December 28, 2012, the Company entered into a revolving credit facility (the “Credit Agreement”), by and among the Company, The PrivateBank and Trust Company, as administrative agent (the “Administrative Agent”) and co-lead arranger, The Bank of the West, as co-lead arranger and IBERIABANK Corporation (the “Lenders”). The Credit Agreement is a $75 million revolving credit facility whereby the lenders agree to make loans on a revolving basis from time to time and to issue letters of credit for up to the $75 million committed amount. The Credit Agreement also provides for an incremental facility of up to $50 million. The termination date of the Credit Agreement is December 28, 2017.

The principal amount of any loans under the Credit Agreement will bear interest at either: (i) LIBOR plus an applicable margin as specified in the Credit Agreement (based on the Company’s senior debt to EBITDA ratio), or (ii) the Base Rate (which is the greater of (a) the Federal Funds Rate plus 0.5% or (b) the prime rate as announced by the Administrative Agent). Quarterly non-use fees, letter of credit fees and administrative agent fees are payable by the Company at rates specified in the Credit Agreement.

The principal amount of any loan drawn under the Credit Agreement may be prepaid in whole or in part, with a minimum prepayment of $5 million, at any time, potentially subject to make-whole provisions.

The Credit Agreement includes customary restrictive covenants for facilities of this type, as discussed below.

Other than commercial letters of credit amounting to $4,808, there were no borrowings under this line of credit during the twelve months ended December 31, 2012, leaving available borrowing capacity at $70,192.

As part of the execution of the Credit Agreement described above, the previous Loan and Security Agreement dated October 29, 2009, as amended, between the Company and The Private Bank and Trust Company (the “PrivateBank Agreement”), was terminated as of December 28, 2012. The Company was in compliance with the bank covenants at the time of the termination and there were no penalties or fees incurred as a result of the termination. There were no borrowings outstanding at the time of the termination and all letter of credit amounts issued and outstanding under the terminated agreement were transferred to the Lenders under the Credit Agreement discussed above.

In 2011, the Company entered into an agreement with Bank of the West whereby the Company agrees to maintain a cash balance at the bank equal to the full amount of certain commercial letters of credit.  The agreement was terminated and all the remaining liabilities were transferred to the Credit Agreement discussed above.

B.            Senior Secured Notes and Shelf Agreement

On December 28, 2012, the Company also entered into a $50 million Senior Secured Notes purchase (“Senior Notes”) and a $25 million private shelf agreement (the “Notes Agreement”) by and among the Company and The Prudential Investment Management, Inc. and certain Prudential affiliates (the “Noteholders”).

A total of $50 million in Senior Notes was funded on December 28, 2012. The Senior Notes are due December 28, 2022 and bear interest at an annual rate of 3.65%, paid quarterly in arrears. Annual principal payments of $7.1 million are required beginning December 28, 2016 through December 28, 2021 with a final payment due on December 28, 2022. The principal amount may be prepaid in whole or in part, with a minimum prepayment of $5 million, at any time, subject to make-whole provisions.

The Notes Agreement provides for the issuance of additional notes of up to $25 million, during the first three years of the Notes Agreement with maturity dates no more than 10 years from the date issued, at the market interest rate for notes with equivalent terms and conditions.

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All loans made under both the Credit Agreement and the Notes Agreement are secured by our assets, including, among others, our cash, inventory, goods, equipment (excluding equipment subject to permitted liens) and accounts receivable. All of our domestic subsidiaries have issued joint and several guaranties in favor of the Lenders and Noteholders for all amounts under the Credit Agreement and Notes Agreement.

Both the Credit Agreement and the Notes Agreement contain various restrictive and financial covenants including among others, minimum tangible net worth, senior debt/EBITDA ratio, debt service coverage requirements and a minimum balance for unencumbered net book value for fixed assets. In addition, the agreements include restrictions on investments, change of control provisions and provisions in the event the Company disposes more than 20% of its total assets.

The Company was in compliance with the bank covenants as of December 31, 2012.

C.            Canadian Credit Facility

The Company has a credit facility with a Canadian bank for purposes of issuing commercial letters of credit in Canada, for an amount of up to $10,000 in Canadian dollars. The credit facility has an annual renewal and provides for the issuance of commercial letters of credit for a term of up to five years. The facility provides for an annual fee of 1% for any issued and outstanding commercial letters of credit. Letters of credit can be denominated in either Canadian or U.S. dollars. As of December 31, 2012 and 2011, total commercial letters of credit outstanding under this credit facility totaled $1,364 and $4,036 in Canadian dollars, respectively.  As of December 31, 2012, the available borrowing capacity under this credit facility was $8,636 in Canadian dollars.  The credit facility contains a working capital restrictive covenant for our Canadian subsidiary, Born Heaters Canada.  At December 31, 2012, the Company was in compliance with the bank covenant.

During the past several years, global market and economic conditions have been volatile and have had an adverse impact on financial markets in general. Many lenders and institutional investors have reduced and, in some cases, ceased to provide funding to borrowers resulting in severely diminished liquidity and credit availability.  We currently see some improvements in the credit markets, however, the extent to which these conditions may improve is not clear. At this time, the credit markets have not adversely affected the Company’s cost and availability of funding, and we do not expect it to be materially impacted in the near future.

We have experienced no loss or lack of access to our cash or cash equivalents or funds under our credit facility; however, we can provide no assurances that access to our cash, cash equivalents and funds under our credit facility will not be impacted by adverse conditions in the financial markets.

Cash Flows

Cash flows during the years ended December 31, 2012, 2011 and 2010 are summarized as follows:

	2012			2011			2010
	(Thousands)			(Thousands)			(Thousands)
Change in cash
Net cash provided by operating activities	$	98,393		$	39,500		$	81,848
Net cash used in investing activities	(95,008		)	(22,609		)	(54,177		)
Net cash provided (used) in financing activities	33,860			(12,022		)	(1,364		)
Net cash used in discontinued operations	—			—			(874		)
Net change in cash	$	37,245		$	4,869		$	25,433

Operating Activities

The source of our cash flow from operating activities and the use of a portion of that cash in our operations for the years ended December 31, 2012, 2011 and 2010 were as follows:

	2012			2011			2010
	(Thousands)			(Thousands)			(Thousands)
Operating Activities
Operating income	$	96,286		$	98,999		$	57,804
Depreciation and amortization	35,623			33,803			24,484
Loss (gain) on sale of property and equipment	(2,752		)	335			(1,359		)
Distributions received from joint venture	1,358			10,136			9,491
Goodwill/intangible impairment	—			—			1,732
Net deferred taxes	(879		)	7,453			(1,091		)
Changes in assets and liabilities	6,962			(66,768		)	19,605
Foreign exchange gain (loss)	(36		)	(96		)	250
Interest income	157			331			616
Interest expense	(3,619		)	(5,431		)	(6,196		)
Other expenses	(870		)	(1,088		)	(1,429		)
Provision for income taxes	(33,837		)	(38,174		)	(22,059		)
Net cash provided by operating activities	$	98,393		$	39,500		$	81,848

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The table above summarizes the cash flow elements provided by operating activities for 2012, 2011 and 2010.  Net cash provided by operating activities for 2012 of $98.4 million increased by $58.2 million compared to 2011.

A significant cause of this increase was due to the change in assets and liabilities during 2012 which provided cash of $7.0 million compared to the use of cash of $66.8 million in 2011.  This accounted for an increase in operating cash of  $73.8 million.

As a result of the St. Bernard joint venture nearing completion in 2012, non-consolidated entity distributions have decreased by $8.8 million compared to the prior year.  The provision for income taxes decreased by $4.3 million as a result of lower pretax income and a lower tax rate in 2012.  As well, net deferred taxes for 2012 decreased by $8.3 million compared to the prior year.

The significant components of the $7.0 million change in assets and liabilities from the 2011 balance sheet to the 2012 balance sheet are summarized in the following table.

	Change in Balance Sheet			2012 Acquisition Balance Sheets			Net Change in Operating Cash Flow
Increase in accounts receivable	$	(80,717	)	$	28,625		$	(52,092	)
Increase in costs and estimated earnings in excess of billings	165			5,261			5,426
Increase in customer retention deposits and restricted cash	(3,887		)	—			(3,887		)
Subtotal	(84,439		)	33,886			(50,553		)
Increase in accounts payable	44,821			(10,483		)	34,338
Increase in accrued expenses and other current liabilities	16,229			(13,053		)	3,176
Increase in billings in excess of costs and estimated earnings	21,163			(524		)	20,639
Other	(2,066		)	1,428			(638		)
Subtotal	80,147			(22,632		)	57,515
Net changes in assets and liabilities	$	(4,292	)	$	11,254		$	6,962

Accounts receivable for the Sprint, Saxon and Q3C acquisitions decreased $7.6 million subsequent to their acquisition dates.  The remaining $59.7 million increase reflects the increased revenue levels for the Company.  At December 31, 2012, accounts receivable of $268.1 million represented 28.8% of total assets compared to 25.7% in the prior year. Of the total amount, $39.7 million was retainage held by customers in accordance with contract terms and $227.5 million was outstanding contract receivables.  During the month of January 2013, we collected more than 70% of the outstanding contracts receivable balance, and by the end of February 2013, we had collected more than 95% of the amount. We continue to have an excellent collection history, and we also maintain lien rights that can provide additional collection security.

The increase of $20.6 million in billings in excess of costs and estimated earnings was due primarily to an increase in $21.0 million based on contractual terms for one of the power plants under construction by our ARB industrial group in California

Accounts payable increased $34.3 million as a result of the increased level of operating activity at the end of the 2012 year compared to the prior year.

For 2011, the changes in assets and liabilities were not impacted by any acquisition balance sheets.  These changes decreased operating cash flow by $66.8 million. The components of this change are included in the consolidated statements of cash flow for 2011. The significant changes include a $20.8 million decrease in accounts receivable, a $17.2 million increase in accounts payable, an increase in accrued liabilities of $4.0 million and an increase in other long term liabilities of $6.7 million. In addition, billings in excess of costs and estimated earnings decreased by $67.5 million while costs and estimated earnings in excess of billings increased by $24.6 million, inventory and prepaid expenses increased by $6.8 million and customer retention deposits and restricted cash increased by $19.0 million.

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As of December 31, 2011, accounts receivable represented 25.7% of total assets compared to 29.6% in 2010.

Investing activities

	2012		2011		2010
	(Thousands)		(Thousands)		(Thousands)
Capital expenditures — cash	$	37,395	$	29,052	$	23,640
Capital expenditures — financed	2,932		5,312		—
Total capital expenditures	$	40,327	$	34,364	$	23,640

We purchased property and equipment for $40.3 million, $34.4 million and $23.6 million in the years ended December 31, 2012, 2011 and 2010, respectively, principally for our construction activities. We believe the ownership of equipment is generally preferable to renting equipment on a project-by-project basis, as ownership helps to ensure the equipment is available for our workloads when needed. In addition, ownership has historically resulted in lower overall equipment costs.

For 2012 purchases, we paid $37.4 million in cash, and we financed $2.9 million.  Included in the 2012 purchases is approximately $5.6 million for the completion of our equipment yard and maintenance shop in Carson, California, and for the purchase of land and buildings in San Diego, California.  The remaining $34.7 million in 2012 includes equipment for $25.7 million and rolling stock for $7.6 million.

We periodically sell and acquire equipment, typically to update our fleet. We received proceeds from the sale of used equipment of $9.0 million and $3.4 million for 2012 and 2011, respectively. For the past few years, we have been able to rent major equipment not used for our own projects to third parties, but with the current economic environment, equipment rentals have decreased to a small amount.

As part of our cash management program, we invested $6.9 million and $36.0 million in 2012 and 2011, respectively, in short term investments, and sold $26.4 million and $39.0 million in 2012 and 2011, respectively.  Short term investments consist primarily of CDs purchased through the CDARS (Certificate of Deposit Account Registry Service) process and U.S. Treasury bills with various financial institutions that are backed by the federal government FDIC program.

We used $86.2 million in cash for the Sprint, Silva, Saxon and Q3C acquisitions during 2012.

Financing activities

Financing activities provided cash of $33.9 million in 2012. Significant transactions impacting cash flows from financing activities included:

·The Company entered into and received funds for $44.5 million in equipment note refinancing arrangements during 2012.  Additionally, on December 28, 2012, the Company entered into a $50 million Senior Secured Notes purchase agreement, which was funded on December 28, 2012;

·$26.6 million reduction of long-term debt and $9.0 million of capital leases as a result of both loan repayments and refinancing of higher interest rate loans;

·$17.5 million in total payments of the subordinated notes related to both the JCG and Rockford acquisitions, which included the March 14, 2012 payment in full of the JCG subordinated notes; and

·Dividends of $7.7 million were paid to our stockholders during the year ended December 31, 2012, representing an annual dividend rate of $0.12 per share of common stock.  The Company declared and paid the fourth quarter 2012 dividend in the month of December 2012, rather than being paid in January 2013, resulting in five quarterly dividends paid during 2012.

Capital Equipment Requirements

In order to meet the needs of our continuing growth, we intend to purchase construction equipment of approximately $40 to $45 million during 2013, net of proceeds from sales.  The source of the funds for this requirement will consist of cash and secured long-term borrowing.

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Common Stock

The Company is authorized to issue 90,000,000 shares of $0.0001 par value common stock, of which 51,403,686 and 51,059,132 shares were issued and outstanding as of December 31, 2012 and 2011, respectively. As of December 31, 2012, there were 302 holders of record of our common stock.

In March 2012, the Company issued 111,790 shares of common stock to managers and executives of the Company under a purchase arrangement within the Company’s Long-Term Incentive Plan.  The Company issued 12,395 shares of common stock in February 2012 and 15,280 shares in July 2012 as part of the quarterly compensation of non-employee members of the Board of Directors.  Additionally, as part of the acquisition of Sprint, the Company issued 62,052 unregistered shares of common stock in March 2012.

As part of the acquisition of Q3C, the Company agreed to issue shares of common stock amounting to $0.43 million based on the average December 2012 closing price, or $14.69 per share. The Company issued 29,273 unregistered shares of stock in February 2013.

In May 2012, the Company’s Board of Directors authorized a share repurchase program under which the Company may, from time to time and depending on market conditions, share price and other factors, acquire shares of its common stock on the open market or in privately negotiated transactions up to an aggregate purchase price of $20 million.  During the period from April 1, 2012 through June 30, 2012, the Company purchased and cancelled 89,600 shares of stock for $1.0 million at an average cost of $11.17 per share.  No shares were repurchased during the period of July 1, 2012 through December 31, 2012.  The share repurchase program expired December 31, 2012.

Contingent shares of common stock

JCG Contingent Shares

A total of 1,095,646 shares were issued to JCG’s sellers in March 2011 as a result of JCG meeting its defined performance target per the merger agreement between JCG and the Company.

Rockford Contingent Shares

A total of 494,095 shares issued to Rockford’s former stockholders in March 2011 as a result of Rockford meeting a defined performance target in 2010.  Additionally, in April 2012, the Company issued 232,637 shares of common stock to the Rockford sellers as a result of Rockford meeting a defined performance target in 2011.

Preferred Stock

The Company is authorized to issue 1,000,000 shares of $0.0001 par value preferred stock.  There are no shares of Preferred Stock outstanding at December 31, 2012.

Credit Agreements.

For a description of our credit agreements and subordinated notes payable, see Note 12 — “Credit Arrangements” of the Notes to Consolidated Financial Statements included in Item 8 of this Form 10-K.

Related Party Transactions

We have entered into various leasing transactions with Stockdale Investment Group, Inc. (“SIGI”).  Brian Pratt, our Chief Executive Officer, President and Chairman of the Board of Directors and our largest stockholder, holds a majority interest and is the chairman, president and chief executive officer and a director of SIGI.  John M. Perisich, our Senior Vice President and General Counsel, is secretary of SIGI.

We lease properties located in Bakersfield, Pittsburg and San Dimas, California and in Pasadena, Texas from SIGI.  During the years ended December 31, 2012, 2011 and 2010, we paid $0.9 million, $0.9 million and $0.9 million, respectively, in lease payments to SIGI for the use of these properties.

In 2010, the Company entered into a $6.1 million agreement to construct a wastewater facility for Pluris, LLC, a private company in which Brian Pratt holds the majority interest. This transaction was reviewed and approved by the Audit Committee of the Board of Directors of the Company.  The project was completed in November 2011 and the Company recognized revenues of $0.4 and $5.7 million in 2012 and 2011, respectively.

We lease a property from Roger Newnham, one of our stockholders and a manager at our subsidiary, Born Heaters Canada. The property is located in Calgary, Canada.  During the years ended December 31, 2012, 2011 and 2010, we paid $0.29 million, $0.28 million and $0.25 million, respectively, in lease payments to Mr. Newnham for the use of this property. The term of the lease is through December 31, 2014.

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As a result of the November 2010 acquisition of Rockford, the Company entered into a lease for property from Lemmie Rockford, one of our stockholders.  The property is located in Toledo, Washington.  During the years ended December 31, 2012 and 2011, Primoris paid $0.09 and $0.09 million in lease payments to Mr. Rockford for the use of this property.  The lease expires on January 15, 2015.

As a result of the November 2012 acquisition of Q3C, the Company became party to leased property from Quality RE Partners, owned by three of the Q3C selling shareholders, of which two are current employees, including Jay Osborn, President of Q3C.  The lease commenced October 28, 2012.  The property is located in Little Canada, Minnesota.  During the year ended December 31, 2012, the Company paid $0.31, in lease payments to Quality RE Partners for the use of this property.  The lease expires on October 27, 2022.

We own several non-consolidated investments and have recognized revenues on work performed for those joint ventures.  For the OMPP joint venture, the Company recognized no revenues in 2012 or 2011, and revenues of $0.08 million were recognized in 2010.  For the St. — Bernard Levee Partners joint venture, the Company recognized no revenues in 2012 or 2011, and revenues of $0.5 million were recognized in 2010.  On November 17, 2012, the Company acquired a 49% interest in Alvah, Inc. as part of the Q3C acquisition.  During 2012, payments made to Alvah as a subcontractor by ARB and Q3C amounted to $6,377 and $537, respectively.

Contractual Obligations

As of December 31, 2012, we had $155.4 million of outstanding long-term debt and capital lease obligations.  There were no balances due on the subordinated debt related to the prior year JCG and Rockford acquisitions and there were no short-term borrowings.

A summary of contractual obligations as of December 31, 2012 were as follows:

	Total		1 Year		2 - 3 Years		4 - 5 Years		After 5 Years
	(In Thousands)
Long-term debt and capital lease obligations	$	155,377	$	23,179	$	42,334	$	40,507	$	49,357
Interest on long-term debt (1)	20,520		4,437		6,990		4,705		4,388
Equipment operating leases	20,688		7,207		10,580		2,901		—
Real property leases	12,359		2,728		3,830		2,857		2,944
Real property leases—related parties	7,970		1,598		2,503		1,561		2,308
	$	216,914	$	39,149	$	66,237	$	52,531	$	58,997
Letters of credit	$	6,168	$	5,355	$	813	$	—	—

(1)           The interest amount represents interest payments for our fixed rate debt assuming that principal payments are made as originally scheduled.

Off Balance Sheet Transactions

The following represent transactions, obligations or relationships that could be considered material off-balance sheet arrangements.

·      Letters of credit issued under our lines of credit. At December 31, 2012, we had letters of credit outstanding of $6.2 million, primarily for international projects in our Engineering segment and for providing security to our insurance carriers;

·      Equipment operating leases with a balance of $20.7 million at December 31, 2012;

·      Employment agreements which provide for compensation and benefits under certain circumstances and which may contain a change of control clause.  We may be obligated to make payments under the terms of these agreements;

·      In the ordinary course of our business, we may be required by our customers to post surety bid or completion bonds in connection with services that we provide. At December 31, 2012, we had $1.3 billion in outstanding bonds; and

·      Other guarantees that we make from time to time, such as guaranteeing the obligations of our subsidiaries.

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Backlog

In the industries in which we operate, backlog can be considered an indicator of potential future performance because it represents a portion of the future revenue stream. Different companies in our industry define backlog differently. We consider backlog as the anticipated revenue from the uncompleted portions of existing contracts. We calculate backlog differently for different types of contracts. For our fixed price and fixed unit price contracts, we include the full remaining portion of the contract in our calculation. Since their ultimate revenue amount is difficult to determine, we do not include time-and-equipment, time-and-materials and cost-plus contracts in the calculation of backlog.

Our contracts may be terminated by our customers on relatively short notice. In the event of a project cancellation, we may be reimbursed for certain costs, but typically we have no contractual right to the total revenues reflected in backlog. Projects may remain in backlog for extended periods of time.

Backlog by operating segment and the changes in backlog for the periods ending December 31, 2012, 2011 and 2010 were as follows, in thousands:

Segment:	Beginning Backlog as of December 31, 2011		Contract Additions to Backlog		Revenue Recognized from Backlog		Ending Backlog at December 31, 2012		Revenue Recognized from Non-Backlog Projects		Total Revenue for 12 months ended December 31, 2012
East Construction Services	$	813,316	$	725,636	$	568,731	$	970,221	$	93,517	$	662,248
West Construction Services	326,845		684,404		649,960		361,289		182,900		832,860
Engineering	25,402		19,733		30,404		14,731		16,222		46,626
Total	$	1,165,563	$	1,429,773	$	1,249,095	$	1,346,241	$	292,639	$	1,541,734

Segment:	Beginning Backlog as of December 31, 2010		Contract Additions to Backlog		Revenue Recognized from Backlog		Ending Backlog at December 31, 2011		Revenue Recognized from Non-Backlog Projects		Total Revenue for 12 months ended December 31, 2011
East Construction Services	$	630,567	$	670,868	$	488,119	$	813,316	$	40,626	$	528,745
West Construction Services	222,018		533,144		428,317		326,845		453,416		881,733
Engineering	43,187		27,642		45,427		25,402		4,245		49,672
Total	$	895,772	$	1,231,654	$	981,863	$	1,165,563	$	498,286	$	1,460,150

Segment:	Beginning Backlog as of December 31, 2009		Contract Additions to Backlog		Revenue Recognized from Backlog		Ending Backlog at December 31, 2010		Revenue Recognized from Non-Backlog Projects		Total Revenue for 12 months ended December 31, 2010
East Construction Services	$	572,567	$	489,640	$	431,640	$	630,567	$	48,893	$	480,533
West Construction Services	136,722		289,039		203,743		222,018		198,530		402,273
Engineering	56,012		36,075		48,900		43,187		10,059		58,959
Total	$	765,301	$	814,754	$	684,283	$	895,772	$	257,482	$	941,765

As of December 31, 2012, our total backlog was $1.35 billion representing an increase of $180.7 million, or 15.5%, from $1.16 billion as of December 31, 2011.  We expect that approximately 57% of the total backlog at December 31, 2012, will be recognized as revenue during 2013, with $435 million expected for the East Construction Services segment, $320 million for the West Construction Services segment and $14 million for the Engineering segment..

Backlog should not be considered a comprehensive indicator of future revenues, as a percentage of our revenues are derived from projects that are not part of a backlog calculation.

Revenues recognized from non-backlog projects are generated by projects completed under time-and-equipment, time-and-materials and cost-reimbursable-plus-fee contracts.

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Effects of Inflation and Changing Prices

Our operations are affected by increases in prices, whether caused by inflation or other economic factors. We attempt to recover anticipated increases in the cost of labor, equipment, fuel and materials through price escalation provisions in certain major contracts or by considering the estimated effect of such increases when bidding or pricing new work or by entering into back-to-back contracts with suppliers and subcontractors.

Recently Issued Accounting Pronouncements

See Note 2 — “Summary of Significant Accounting Policies” of the Notes to Consolidated Financial Statements included in Item 8 of this Form 10-K for a description of recently issued accounting pronouncements, including the expected dates of adoption and estimated effects on our results of operations, financial position and cash flows.

ITEM 7A.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

In the ordinary course of business, we are exposed to risks related to market conditions. These risks primarily include fluctuations in foreign currency exchange rates, interest rates and commodity prices. We may seek to manage these risks through the use of financial derivative instruments. These instruments may include foreign currency exchange contracts and interest rate swaps.

We do not execute transactions or use financial derivative instruments for trading or speculative purposes. We enter into transactions with counter parties that are generally financial institutions in a matter to limit significant exposure with any one party.

The carrying amounts for cash and cash equivalents, accounts receivable, short term investments, short-term debt, accounts payable and accrued liabilities shown in the consolidated balance sheets approximate fair value at December 31, 2012 and 2011, due to the generally short maturities of these items. At December 31, 2012 and 2011, we held short term investments which were primarily in four to six month certificates of deposits (“CDs”) through the CDARS (Certificate of Deposit Account Registry Service) process and U.S. Treasury bills with various financial institutions that are backed by the federal government FDIC program.  We expect to hold our investments to maturity.

At December 31, 2012, all of our long-term debt was subject to fixed interest rates.

At December 31, 2012 and 2011, we had no derivative financial instruments.

ITEM 8.FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Our financial statements, supplementary financial data and financial statement schedules are included in a separate section at the end of this Annual Report on Form 10-K. The financial statements, supplementary data and schedules are listed in the index on page F-1 of this Annual Report on Form 10-K and are incorporated herein by reference.

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 that are designed to ensure that information required to be disclosed in our reports under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including our Chief Executive Officer (“CEO”) and Executive Vice President, Chief Financial Officer (“CFO”), as appropriate, to allow for timely decisions regarding required disclosure. In designing and evaluating our disclosure controls and procedures, our management recognizes that any system of controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, as ours are designed to do, and our management necessarily is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. The Company’s disclosure controls and procedures are designed to provide reasonable assurance of achieving their stated objectives.

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In connection with the preparation of this Annual Report on Form 10-K, as of December 31, 2012, an evaluation was performed under the supervision and with the participation of our management, including our CEO and CFO, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act). Based on that evaluation, as of the end of the period covered by this Annual Report on Form 10-K, our CEO and CFO concluded that our disclosure controls and procedures were effective at the reasonable assurance level to ensure that the information required to be disclosed by us in our reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and to ensure that the information required to be disclosed by us in reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our CEO and CFO, as appropriate, to allow timely decisions regarding required disclosures.

Management’s Annual Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control over financial reporting is 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. Our 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 our assets;

(ii)provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and

(iii)provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our 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.

Management assessed and evaluated the effectiveness of our internal control over financial reporting as of December 31, 2012. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control—Integrated Framework. Based on the results of management’s assessment and evaluation, our CEO and CFO believe that our internal control over financial reporting is effective as of December 31, 2012.  Management reviewed the results of its assessment with the Audit Committee of our Board of Directors.

As discussed in Note 4 — “Business Combinations” of the Notes to Consolidated Financial Statements included in Item 8 of this Form 10-K, we acquired the following entities during 2012:

·      Sprint Pipeline Services, L.P. on March 12, 2012;

·      Silva Companies on May 30, 2012;

·      The Saxon Group on September 28, 2012; and

·      Q3 Contracting Inc. on November 17, 2012.

The operations of Silva were merged into those of JCG.  We have excluded the acquisitions of Sprint, Saxon and Q3C from our assessment of the effectiveness of our internal control over financial reporting as of December 31, 2012, whose financial statements in aggregate constitute approximately 8.3% of total assets (excluding approximately $48.4 million of goodwill and intangible assets, which were integrated into the Company’s systems and control environment), approximately 7.3% of total revenues, and approximately 8.3% of pre-tax income (excluding approximately $855,000 of amortization of intangible assets, which was integrated into the Company’s systems and control environment) of the consolidated financial statement amounts as of and for the year ended December 31, 2012.

The independent registered public accounting firm that audited our financials statements contained in this annual report has issued an audit report on the effectiveness of our internal control over financial reporting.  There has been no change in our internal control over financial reporting during our most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect our internal control over financial reporting.

ITEM 9B.   OTHER INFORMATION

None.

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PART III

ITEM 10.    DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Directors

Information relating to the officers and directors of our company, other corporate governance matters and other information required under this Item 10 is set forth in our Proxy Statement for our 2013 Annual Meeting of Stockholders (“Proxy Statement”) and is incorporated herein by reference. The following is a listing of certain information regarding our executive officers.

Executive Officers

Brian Pratt.  Mr. Pratt has been our President, Chief Executive Officer and Chairman of the Board since July 2008. Mr. Pratt directs strategy, establishes goals and oversees our operations. Prior to that, he served as the President, Chief Executive Officer and Chairman of the Board of Former Primoris and its predecessor, ARB, Inc., a California corporation, since 1983. He assumed operational and financial control of ARB in 1983. Prior to the merger with Rhapsody, Mr. Pratt was majority owner of Former Primoris. Mr. Pratt has over 30 years of hands-on operations and management experience in the construction industry. Mr. Pratt completed four years of courses in Civil Engineering at California Polytechnic College in Pomona in 1974. Mr. Pratt is 61 years old.

Peter J. Moerbeek.  Mr. Moerbeek was named as our Executive Vice President, Chief Financial Officer effective February 6, 2009. He has served as one of our Directors since July 2008. Previously, he served as Chief Executive Officer of a private-equity funded company engaged in the acquisition and operation of water and wastewater utilities. As a founder of the company from June 2006 to February 2007, he was involved in raising equity capital for the company. From August 1995 to June 2006, Mr. Moerbeek held several positions with publicly traded Southwest Water Company, including as Director from 2001 to 2006; President and Chief Operating Officer from 2004 to 2006; President of the Services Group from 1997 to 2006; Secretary from 1995 to 2004; and Chief Financial Officer from 1995 to 2002. From 1989 to 2005, Mr. Moerbeek was the Chief Financial and Operations Officer for publicly-traded Pico Products, Inc. Mr. Moerbeek received a B.S. in Electrical Engineering in 1969 and a MBA in 1971 from the University of Washington. Mr. Moerbeek is 65 years old.

John P. Schauerman.  Mr. Schauerman was named as our Executive Vice President, Corporate Development effective February 6, 2009 and has served as a Director since July 2008. He previously served as our Chief Financial Officer, and prior to the merger, he served as the Chief Financial Officer of Former Primoris beginning in February 2008. He also served as a Director of Former Primoris from 1993 to the time of the Rhapsody merger. He joined ARB in 1993 as Senior Vice President. In his current role, he is responsible for developing and integrating our overall strategic plan, including the evaluation and structuring of new business opportunities and acquisitions, particularly in the area of renewable energy. Prior to joining ARB in 1993, he was Senior Vice President of Wedbush Morgan Securities. Mr. Schauerman received a B.S. in Electrical Engineering from UCLA in 1979 and an MBA in 1984 from Columbia University. Mr. Schauerman is 56 years old.

Michael D. Killgore.  Mr. Killgore was named as our Executive Vice President, Director of Construction Services in March 2010, and has served as a director since the JCG acquisition in December 2009. He is responsible for overall management related to the operations of both our “East Construction Services” and “West Construction Services” business segments. He has been with James Construction Group and its predecessor companies since 1977, and was Chief Executive Officer of James Construction Group beginning in  2007. He received a B.S. Civil Engineering degree from Louisiana Tech University in 1978.  Mr. Killgore is a registered Civil and Environmental Engineer in the state of Louisiana. Mr. Killgore is 56 years old.

John M. Perisich.  Mr. Perisich has served as our Senior Vice President and General Counsel since July 2008. Prior to that, he served as Senior Vice President and General Counsel of Former Primoris beginning in  February 2006, and previous to that was Vice President and General Counsel of Former Primoris. Mr. Perisich joined ARB in 1995. Prior to joining ARB, Mr. Perisich practiced law at Klein, Wegis, a full service law firm based in Bakersfield, California. He received a B.A. degree from UCLA in 1987, and a J.D. from the University of Santa Clara in 1991. Mr. Perisich is 48 years old.

ITEM 11.    EXECUTIVE COMPENSATION

Information required under this Item 11 is set forth in our Proxy Statement and is incorporated herein by reference, except for the information set forth under the caption, “Compensation Committee Report” of our Proxy Statement, which specifically is not incorporated herein by reference.

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ITEM 12.SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Information required under this Item 12 is set forth in our Proxy Statement and is incorporated herein by reference.

ITEM 13.CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The information required under this Item 13 is set forth in our Proxy Statement and is incorporated herein by reference.

ITEM 14.    PRINCIPAL ACCOUNTING FEES AND SERVICES

Information regarding principal accounting fees and services and other information required under this Item 14 is set forth in our Proxy Statement and is incorporated herein by reference.

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PART IV

ITEM 15.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES

(A)We have filed the following documents as part of this Report:

1.Consolidated Balance Sheets of Primoris Services Corporation and subsidiaries as of December 31, 2012 and 2011 and the related Consolidated Statements of Income, Stockholders’ Equity and Cash Flows for the years ended December 31, 2012, 2011 and 2010.

2.Report of Moss Adams LLP, independent registered public accounting firm, related to the consolidated financial statements in part (A)(1) above.

3.Notes to the consolidated financial statements in part (A)(1) above.

4.List of exhibits required by Item 601 of Regulation S-K.  See part (B) below.

(B)The following is a complete list of exhibits filed as part of this Report, some of which are incorporated herein by reference from certain other of our reports, registration statements and other filings with the SEC, as referenced below:

Exhibit No.	Description
Exhibit 2.1	Agreement and Plan of Merger, dated February 19, 2008, by and among Rhapsody Acquisition Corp., Primoris Corporation and certain stockholders of Primoris Corporation (1)
Exhibit 2.2	First Amendment to Agreement and Plan of Merger, dated May 15, 2008, by and among Rhapsody Acquisition Corp., Primoris Corporation and certain stockholders of Primoris Corporation (2)
Exhibit 2.3	Membership Interest Purchase Agreement, dated November 18, 2009, by and among Primoris Services Corporation, James Construction Group, LLC, each of the limited liability company members of James Construction Group, LLC and the representative of the limited liability company members of James Construction Group, LLC (3)
Exhibit 2.4	First Amendment to the Membership Interest Purchase Agreement, dated December 18, 2009, by and among Primoris Services Corporation, James Construction Group, LLC, each of the limited liability company members of James Construction Group, LLC and the representative of the limited liability company members of James Construction Group, LLC (4)
Exhibit 2.5	Second Amendment to Membership Interest Purchase Agreement, dated January 14, 2010, by and among Primoris Services Corporation, James Construction Group, LLC and the representative of the limited liability company members of James Construction Group, LLC (5)
Exhibit 2.6	Membership Interest Purchase Agreement, dated July 1, 2010, by and between Primoris Services Corporation, Kealine Holdings LLC and WesPac Energy LLC (6)
Exhibit 2.7	Agreement and Plan of Merger, dated November 8, 2010, by and among Primoris Services Corporation, a Delaware corporation, Primoris Merger Sub, Inc., a Delaware corporation and a wholly-owned subsidiary of Primoris Services Corporation, Rockford Holdings Corporation, a privately-held Delaware corporation, all of the stockholders of Rockford Holdings Corporation and Christopher S. Wallace as representative of the stockholders of Rockford Holdings Corporation (7)

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Exhibit 2.8	Stock Purchase Agreement, dated November 8, 2012, by and among Primoris Services Corporation, a Delaware corporation, Q3 Contracting Inc., a privately-held Minnesota corporation, all of the shareholders of Q3 Contracting Inc. and Jay P. Osborn as representative of the shareholders of Q3 Contracting Inc. (8)
Exhibit 3.1	Fourth Amended and Restated Certificate of Incorporation of Primoris Services Corporation, dated May 21, 2009 (9)
Exhibit 3.2	Amended and Restated Bylaws of Primoris Services Corporation (10)
Exhibit 3.3	Certificate of Designations, Powers, Preferences and Rights of the Series A Non-Voting Contingent Convertible Preferred Stock of Primoris Services Corporation, dated December 14, 2009 (11)
Exhibit 4.1	Specimen Common Stock Certificate (12)
Exhibit 10.1	Employment Agreement, dated February 19, 2008, by and among Primoris Services Corporation and Brian Pratt (#) (10)
Exhibit 10.2	Employment Agreement, dated February 18, 2008, by and among Primoris Services Corporation and John P. Schauerman (#)(10)
Exhibit 10.3	Employment Agreement, dated February 18, 2008, by and among Primoris Services Corporation and John M. Perisich (#)(10)
Exhibit 10.4	Employment Agreement, dated February 18, 2008, by and among Primoris Services Corporation and Alfons Theeuwes (#)(10)
Exhibit 10.5	Employment Agreement, dated February 6, 2009, by and among Primoris Services Corporation and Peter J. Moerbeek (#)(10)
Exhibit 10.6	Employment Agreement, dated November 18, 2009, by and among James Construction Group, LLC and Michael D. Killgore (#)(4)
Exhibit 10.7	2008 Long-Term Equity Incentive Plan (#)(13)
Exhibit 10.8	General Agreement of Indemnity, dated in 2004, by and among Primoris Corporation, ARB, Inc., ARB Structures, Inc., Cardinal Contractors, Onquest, Inc. and Liberty Mutual Insurance Company (10)
Exhibit 10.9	Loan and Security Agreement, dated October 28, 2009, by and between Primoris Services Corporation and The PrivateBank and Trust Company (14)
Exhibit 10.10	First Amendment to Loan and Security Agreement, dated January 14, 2010, by and among Primoris Services Corporation and The PrivateBank and Trust Company (15)
Exhibit 10.11	Second Amendment to Loan and Security Agreement, dated September 30, 2010, by and among Primoris Services Corporation and The PrivateBank and Trust Company (15)
Exhibit 10.12	Escrow Agreement, dated December 15, 2009, by and among Primoris Services Corporation, the representative of the limited liability company members of James Construction Group, LLC and Continental Stock Transfer & Trust Company, as escrow agent (4)
Exhibit 10.13	Promissory Note, dated December 18, 2009, executed by Primoris Services Corporation in favor of the limited liability company members of James Construction Group, LLC (4)
Exhibit 10.14	Subordination Agreement, dated December 18, 2009, by and among The PrivateBank and Trust Company and the limited liability company members of James Construction Group, LLC (4)

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Exhibit 10.15	Subordination Agreement, dated December 18, 2009, by and among Liberty Mutual Insurance Company and the limited liability company members of James Construction Group, LLC (4)
Exhibit 10.16	Subordination Agreement, dated December 18, 2009, by and among CNA Surety Corporation and the limited liability company members of James Construction Group, LLC (4)
Exhibit 10.17	Promissory Note, dated December 18, 2009, executed by James Construction Group, LLC in favor of the limited liability company members of James Construction Group, LLC (4)
Exhibit 10.18	Noncompetition Agreement, dated December 18, 2009, by and among Primoris Services Corporation and Michael D. Killgore (4)
Exhibit 10.19	Master Loan and Security Agreement, dated June 25, 2010, by and between Stellaris, LLC and Banc of America Leasing & Capital, LLC (16)
Exhibit 10.20	Addendum to Master Loan and Security Agreement, dated June 25, 2010, by and between Stellaris, LLC, James Construction Group, LLC and Banc of America Leasing & Capital, LLC (16)
Exhibit 10.21	Equipment Security Note, dated June 25, 2010, by and between Stellaris, LLC, James Construction Group, LLC and Banc of America Leasing & Capital, LLC (16)
Exhibit 10.22	Master Loan and Security Agreement, dated August 31, 2009, by and between Stellaris, LLC and Fifth Third Bank (16)
Exhibit 10.23	Amendment No. 001 to Master Loan and Security Agreement, dated June 16, 2010, by and between Stellaris, LLC, James Construction Group, LLC and Fifth Third Bank (16)
Exhibit 10.24	Amendment No. 002 to Master Loan and Security Agreement, dated June 29, 2010, by and between Stellaris, LLC, James Construction Group, LLC and Fifth Third Bank (16)
Exhibit 10.25	Promissory Note, dated June 16, 2010, by and between Stellaris, LLC, James Construction Group, LLC and Fifth Third Bank (16)
Exhibit 10.26	Purchase Trading Plan Agreement, dated September 7, 2010, by and between Primoris Services Corporation and CJS Securities, Inc. (17)
Exhibit 10.27	Convertible Promissory Note, dated November 12, 2010, executed by Primoris Services Corporation in favor of certain of the stockholders of Rockford Holdings Corporation (18)
Exhibit 10.28	Form of Employment Agreement, dated November 5, 2010, by and among Rockford Corporation and Employee (18)
Exhibit 10.29	Form of Noncompetition Agreement, dated November 5, 2010, by and among Primoris Services Corporation and Employee (18)
Exhibit 10.30	Subordination Agreement, dated November 12, 2010, by and among Primoris Services Corporation, Christopher S. Wallace, as representative of the stockholders of Rockford Holdings Corporation, and Liberty Mutual Insurance Company (18)
Exhibit 10.31	Subordination Agreement, dated November 12, 2010, by and among Primoris Services Corporation, Christopher S. Wallace, as representative of the stockholders of Rockford Holdings Corporation, and The PrivateBank and Trust Company (18)
Exhibit 10.32	Subordination Agreement, dated November 12, 2010, by and among Primoris Services Corporation, Christopher S. Wallace, as representative of the stockholders of Rockford Holdings Corporation, and Michael D. Killgore, as representative of the former members of James Construction Group, LLC (18)
Exhibit 10.33	Subordination Agreement, dated November 12, 2010, by and among Primoris Services

50

	Corporation, Christopher S. Wallace, as representative of the stockholders of Rockford Holdings Corporation, and CNA Surety Corporation (18)
Exhibit 10.34	Loan Agreement, dated December 29, 2010, by and between Stellaris, LLC and RBS Asset Finance, Inc. (19)
Exhibit 10.35	Note, dated December 29, 2010, by and between Stellaris, LLC and RBS Asset Finance, Inc. (19)
Exhibit 10.36	Collateral Schedule No. 1, dated December 29, 2010, by and between Stellaris, LLC and RBS Asset Finance, Inc. (19)
Exhibit 10.37	Guaranty, dated December 29, 2010, by and between Primoris Services Corporation and RBS Asset Finance, Inc. (19)
Exhibit 10.38	Third Amendment to Loan and Security Agreement, dated March 3, 2011, by and among Primoris Services Corporation and The PrivateBank and Trust Company (20)
Exhibit 10.39	Fourth Amendment to Loan and Security Agreement, dated October 20, 2011, by and among Primoris Services Corporation and The PrivateBank and Trust Company (21)
Exhibit 10.40	Credit Agreement, dated September 23, 2011, by and among Primoris Services Corporation and Bank of the West (22)
Exhibit 10.41	Fifth Amendment to Loan and Security Agreement, dated November 28, 2011, by and among Primoris Services Corporation and The PrivateBank and Trust Company (22)
Exhibit 10.42	Loan and Security Agreement, dated November 30, 2011, by and among Stellaris LLC, James Construction Group LLC and JPMorgan Chase Bank, N.A. (22)
Exhibit 10.43	Business Purpose Promissory Note, dated November 30, 2011, by and among Stellaris LLC, James Construction Group LLC and JPMorgan Chase Bank, N.A. (22)
Exhibit 10.44	Schedule A-1 Equipment Collateral, dated November 30, 2011, by and between Stellaris LLC, James Construction Group LLC and JPMorgan Chase Bank, N.A. (22)
Exhibit 10.45	Amendment No. 3 to the Master Loan and Security Agreement Loan and Security Agreement, dated November 30, 2011, by and among James Construction Group LLC, Stellaris LLC, ARB Inc. and Fifth Third Bank (22)
Exhibit 10.46	Promissory Note, dated November 30, 2011, by and among James Construction Group LLC, Stellaris LLC, ARB Inc. and Fifth Third Bank (22)
Exhibit 10.47	Master Loan and Security Agreement, dated December 21, 2011, by and among ARB, Inc. and Banc of America Leasing & Capital, LLC (23)
Exhibit 10.48	Equipment Security Note, dated December 21, 2011, by and among ARB, Inc., Stellaris LLC, Rockford Corporation and Banc of America Leasing & Capital, LLC (23)
Exhibit 10.49	Addendum to Master Loan and Security Agreement, dated December 21, 2011, by and among ARB, Inc., Stellaris LLC, Rockford Corporation and Banc of America Leasing & Capital, LLC (23)
Exhibit 10.50	Guaranty, dated December 21, 2011, by and among Primoris Services Corporation and Banc of America Leasing & Capital, LLC (23)
Exhibit 10.51	General Indemnity Agreement, dated January 24, 2012, by and among Primoris Services Corporation, ARB, Inc. ARB Structures, Inc., OnQuest, Inc., OnQuest Heaters, Inc. Born

51

	Heaters Canada ULC, Cardinal Contractors, Inc., Cardinal Southeast, Inc., Stellaris, LLC, GML Coatings, LLC, James Construction Group, LLC, Juniper Rock Corporation, Rockford Corporation; Alaska Continental Pipeline, Inc., All Day Electric Company, Inc. Primoris Renewables, LLC, Rockford Pipelines Canada, Inc. and Chubb Group of Insurance Companies (24)
Exhibit 10.52	Fifth Amendment to Loan and Security Agreement, dated April 4, 2012, by and among Primoris Services Corporation and The PrivateBank and Trust Company (25)
Exhibit 10.53	Equipment Security Note, dated June 20, 2012, by and among Stellaris, LLC, James Construction Group, LLC and Banc of America Leasing & Capital, LLC (26)
Exhibit 10.54	Amendment Number 1 to Master Loan and Security Agreement, dated June 20, 2012, by and among Stellaris, LLC, James Construction Group, LLC and Banc of America Leasing & Capital, LLC (26)
Exhibit 10.55	Seventh Amendment to Loan and Security Agreement, dated July 18, 2012, by and among Primoris Services Corporation and The PrivateBank and Trust Company (27)
Exhibit 10.56	Eighth Amendment to Loan and Security Agreement, dated October 29, 2012, by and among Primoris Services Corporation and The PrivateBank and Trust Company (28)
Exhibit 10.57	Master Loan and Security Agreement, dated November 1, 2012, by and between Stellaris, LLC and Banc of America Leasing & Capital, LLC (29)
Exhibit 10.58	Amendment to Master Loan and Security Agreement, dated November 7, 2012, by and among Stellaris, LLC, James Construction Group, LLC, Miller Springs Materials, LLC, Primoris Energy Services Corporation and Banc of America Leasing & Capital, LLC (29)
Exhibit 10.59	Equipment Security Note, dated November 1, 2012, by and among Stellaris, LLC, James Construction Group, LLC, Miller Springs Materials, LLC, Primoris Energy Services Corporation and Banc of America Leasing & Capital, LLC (29)
Exhibit 10.60	Loan Agreement, dated December 13, 2012, by and between Stellaris, LLC and Q3 Contracting, Inc. and RBS Asset Finance, Inc. (30)
Exhibit 10.61	Note, dated December 13, 2012, by and among Stellaris, LLC and Q3 Contracting, Inc. and RBS Asset Finance, Inc. (30)
Exhibit 10.62	Guaranty, dated December 13, 2012, by and among Primoris Services Corporation and RBS Asset Finance, Inc. (30)
Exhibit 10.63	Credit Agreement, dated December 28, 2012, by and among Primoris Services Corporation and The PrivateBank and Trust Company, The Bank of the West and IBERIABANK Corporation (31)
Exhibit 10.64	Note Purchase and Private Shelf Agreement, dated December 28, 2012, by and among Primoris Services Corporation and Prudential Investment Management, Inc. and certain Prudential affiliates (31)
Exhibit 14.1	Code of Ethics and Business Conduct (32)
Exhibit 21.1	Subsidiaries and equity investments of Primoris Services Corporation (*)
Exhibit 23.1	Consent of Moss Adams LLP (*)

52

Exhibit 31.1	Certification of chief executive officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (*)
Exhibit 31.2	Certification of chief financial officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (*)
Exhibit 32.1	Certification of chief executive officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (*)
Exhibit 32.2	Certification of chief financial officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (*)
Exhibit 101 INS	XBRL Instance Document (*)
Exhibit 101 SCH	XBRL Taxonomy Extension Schema Document (*)
Exhibit 101 CAL	XBRL Taxonomy Extension Calculation Linkbase Document (*)
Exhibit 101 LAB	XBRL Taxonomy Extension Label Linkbase Document (*)
Exhibit 101 PRE	XBRL Taxonomy Extension Presentation Linkbase Document (*)
Exhibit 101 DEF	XBRL Taxonomy Extension Definition Linkbase Document (*)

(#)  Management contract or compensatory plan, contract or arrangement.

(*)  Filed herewith.

53

(1)	Filed as an exhibit to our Current Report on Form 8-K, as filed with the SEC on February 20, 2008, and which is incorporated herein by reference.
(2)	Filed as an exhibit to our Registration Statement on Form S-4/A (Amendment No. 3) (File No. 333-150343), as filed with the SEC on July 1, 2008, and which is incorporated herein by reference.
(3)	Filed as an exhibit to our Current Report on Form 8-K, as filed with the SEC on November 23, 2009, and which is incorporated herein by reference.
(4)	Filed as an exhibit to our Current Report on Form 8-K, as filed with the SEC on December 23, 2009, and which is incorporated herein by reference.
(5)	Filed as an exhibit to our Current Report on Form 8-K/A (Amendment No. 1), as filed with the SEC on January 22, 2010, and which is incorporated herein by reference.
(6)	Filed as an exhibit to our Current Report on Form 8-K, as filed with the SEC on July 8, 2010, and which is incorporated herein by reference.
(7)	Filed as an exhibit to our Current Report on Form 8-K, as filed with the SEC on November 12, 2010, and which is incorporated herein by reference.
(8)	Filed as an exhibit to our Current Report on Form 8-K, as filed with the SEC on November 15, 2012, and which is incorporated herein by reference.
(9)	Filed as an exhibit to our Quarterly Report on Form 10-Q, as filed with the SEC on August 12, 2009, and which is incorporated herein by reference.
(10)	Filed as an exhibit to our Current Report on Form 8-K, as filed with the SEC on August 6, 2008, and which is incorporated herein by reference.
(11)	Filed as exhibit to our Current Report on Form 8-K, as filed with the SEC on December 17, 2009, and which is incorporated herein by reference.
(12)	Filed as an exhibit to our Registration Statement on Form S-1 (File No. 333-134694), as filed with the SEC on June 2, 2006, and which is incorporated herein by reference.
(13)	Attached as an annex to our Registration Statement on Form S-4/A (Amendment No. 4) (File No. 333-150343), as filed with the SEC on July 9, 2008, and which is incorporated herein by reference.
(14)	Filed as an exhibit to our Current Report on Form 8-K, as filed with the SEC on November 4, 2009, and which is incorporated herein by reference.
(15)	Filed as an exhibit to our Current Report on Form 8-K, as filed with the SEC on October 6, 2010, and which is incorporated herein by reference.
(16)	Filed as an exhibit to our Current Report on Form 8-K, as filed with the SEC on July 1, 2010, and which is incorporated herein by reference.
(17)	Filed as an exhibit to our Current Report on Form 8-K, as filed with the SEC on September 8, 2010, and which is incorporated herein by reference.
(18)	Filed as an exhibit to our Current Report on Form 8-K, as filed with the SEC on November 18, 2010, and which is incorporated herein by reference.
(19)	Filed as an exhibit to our Current Report on Form 8-K, as filed with the SEC on January 6, 2011, and which is incorporated herein by reference.
(20)	Filed as an exhibit to our Annual Report on Form 10-K, as filed with the SEC on March 16, 2011, and which is incorporated herein by reference.
(21)	Filed as an exhibit to our Current Report on Form 8-K, as filed with the SEC on October 25, 2011, and which is incorporated herein by reference.
(22)	Filed as an exhibit to our Current Report on Form 8-K, as filed with the SEC on December 14, 2011, and which is incorporated herein by reference.
(23)	Filed as an exhibit to our Current Report on Form 8-K, as filed with the SEC on December 30, 2011, and which is incorporated herein by reference.
(24)	Filed as an exhibit to our Annual Report on Form 10-K, as filed with the SEC on March 5, 2012, and which is incorporated herein by reference.
(25)	Filed as an exhibit to our Annual Report on Form 10-Q, as filed with the SEC on May 9, 2012, and which is incorporated herein by reference.
(26)	Filed as an exhibit to our Current Report on Form 8-K, as filed with the SEC on June 28, 2012, and which is incorporated herein by reference.
(27)	Filed as an exhibit to our Current Report on Form 8-K, as filed with the SEC on July 23, 2012, and which is incorporated herein by reference.
(28)	Filed as an exhibit to our Current Report on Form 8-K, as filed with the SEC on November 2, 2012, and which is incorporated herein by reference.

54

(29)	Filed as an exhibit to our Current Report on Form 8-K, as filed with the SEC on November 9, 2012, and which is incorporated herein by reference.
(30)	Filed as an exhibit to our Current Report on Form 8-K, as filed with the SEC on December 18, 2012, and which is incorporated herein by reference.
(31)	Filed as an exhibit to our Current Report on Form 8-K, as filed with the SEC on January 7, 2013, and which is incorporated herein by reference.
(32)	Filed as an exhibit to our Annual Report on Form 10-K, as filed with the SEC on March 11, 2010, and which is incorporated herein by reference

55

SIGNATURES

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.

Primoris Services Corporation (Registrant)
BY:	/s/ BRIAN PRATT	BY:	/s/ PETER J. MOERBEEK
	Brian Pratt		Peter J. Moerbeek
	President and Chief Executive Officer		Executive Vice President, Chief Financial Officer
Date:	March 7, 2013

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed by the following persons on behalf of the Registrant and in the capacities indicated and on the date indicated.

BY:	/s/ BRIAN PRATT
	Brian Pratt
	Chairman of the Board of Directors
BY:	/s/ PETER J. MOERBEEK
	Peter J. Moerbeek
	Director
BY:	/s/ MICHAEL D. KILLGORE
	Michael D. Killgore
	Director
BY:	/s/ JOHN P. SCHAUERMAN
	John P. Schauerman
	Director
BY:	/s/ PETER C. BROWN
	Peter C. Brown
	Director
BY:	/s/ STEPHEN C. COOK
	Stephen C. Cook
	Director
BY:	/s/ ERIC S. ROSENFELD
	Eric S. Rosenfeld
	Director
BY:	/s/ ROBERT A. TINSTMAN
	Robert A. Tinstman
	Director
BY:	/s/ THOMAS E. TUCKER
	Thomas E. Tucker
	Director

Date: March 7, 2013

56

PRIMORIS SERVICES CORPORATION

INDEX TO FINANCIAL STATEMENTS

	Page
Report of Independent Registered Public Accounting Firm	F-2
Consolidated Balance Sheets as of December 31, 2012 and 2011	F-3
Consolidated Statements of Income for the Years Ended December 31, 2012, 2011 and 2010	F-4
Consolidated Statements of Stockholders’ Equity for the Years Ended December 31, 2012, 2011 and 2010	F-5
Consolidated Statements of Cash Flows for the Years Ended December 31, 2012, 2011 and 2010	F-6
Notes to Consolidated Financial Statements	F-8

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders

Primoris Services Corporation

We have audited the accompanying consolidated balance sheets of Primoris Services Corporation (the “Company”) as of December 31, 2012 and 2011, and the related consolidated statements of income, stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2012. We also have audited the Company’s internal control over financial reporting as of December 31, 2012, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. As described in Management’s Annual Report on Internal Control Over Financial Reporting, management excluded from its assessment a portion of the internal control over financial reporting at Sprint Pipeline Services, L.P., The Saxon Group, and Q3 Contracting, Inc. which were acquired on March 12, 2012, September 28, 2012 and November 17, 2012, respectively, and whose financial statements in aggregate constitute approximately 8.3% of total assets (excluding approximately $48.4 million of goodwill and intangible assets, which were integrated into the Company’s systems and control environment), approximately 7.3% of total revenues, and approximately 8.3% of pre-tax income (excluding approximately $855,000 of amortization of intangible assets, which was integrated into the Company’s systems and control environment) of the consolidated financial statement amounts as of and for the year ended December 31, 2012. Accordingly, our audit did not include the internal control over financial reporting at Sprint Pipeline Services, L.P., The Saxon Group, and Q3 Contracting, Inc.  The Company’s management is responsible for these financial statements, 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 Annual Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on these consolidated financial statements and an opinion on the Company’s internal control over financial reporting 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 audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the consolidated financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall consolidated financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

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, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Primoris Services Corporation as of December 31, 2012 and 2011, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2012, in conformity with generally accepted accounting principles in the United States of America. Also in our opinion, Primoris Services Corporation maintained, in all material respects, effective internal control over financial reporting as of December 31, 2012, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.

/s/Moss Adams LLP

Irvine, California

March 7, 2013

F-2

PRIMORIS SERVICES CORPORATION

CONSOLIDATED BALANCE SHEETS

(In Thousands, Except Share Amounts)

	December 31,
	2012		2011
ASSETS
Current assets:
Cash and cash equivalents	$	157,551	$	120,306
Short term investments	3,441		23,000
Customer retention deposits and restricted cash	35,377		31,490
Accounts receivable, net	268,095		187,378
Costs and estimated earnings in excess of billings	41,701		41,866
Inventory and uninstalled contract materials	37,193		31,926
Deferred tax assets	10,477		10,659
Prepaid expenses and other current assets	10,800		13,252
Total current assets	564,635		459,877
Property and equipment, net	184,840		129,649
Investment in non-consolidated entities	12,813		12,687
Intangible assets, net	51,978		32,021
Goodwill	116,941		94,179
Total assets	$	931,207	$	728,413
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	151,546	$	106,725
Billings in excess of costs and estimated earnings	158,892		137,729
Accrued expenses and other current liabilities	76,152		59,923
Dividends payable	—		1,532
Current portion of capital leases	3,733		6,623
Current portion of long-term debt	19,446		13,870
Current portion of subordinated debt	—		15,167
Current portion of contingent earnout liabilities	10,900		3,450
Total current liabilities	420,669		345,019
Long-term capital leases, net of current portion	3,831		4,047
Long-term debt, net of current portion	128,367		55,852
Long-term subordinated debt, net of current portion	—		7,334
Deferred tax liabilities	20,018		21,079
Long-term contingent earnout liabilities, net of current portion	12,531		9,268
Other long-term liabilities	13,153		10,882
Total liabilities	598,569		453,481
Commitments and contingencies
Stockholders’ equity
Preferred stock—$.0001 par value, 1,000,000 shares authorized, none issued and outstanding at December 31, 2012 and 2011	—		—
Common stock—$.0001 par value; 90,000,000 shares authorized; 51,403,686 and 51,059,132 issued and outstanding at December 31, 2012 and 2011, respectively	5		5
Additional paid-in capital	155,605		150,003
Retained earnings	175,517		124,924
Non-controlling interest	1,511		—
Total stockholders’ equity	332,638		274,932
Total liabilities and stockholders’ equity	$	931,207	$	728,413

See accompanying notes.

F-3

PRIMORIS SERVICES CORPORATION

CONSOLIDATED STATEMENTS OF INCOME

(In Thousands, Except Per Share Amounts)

	Year Ended December 31,
	2012			2011			2010
Revenues	$	1,541,734		$	1,460,150		$	941,765
Cost of revenues	1,349,024			1,274,947			818,976
Gross profit	192,710			185,203			122,789
Selling, general and administrative expenses	96,424			86,204			64,985
Operating income	96,286			98,999			57,804
Other income (expense):
Income from non-consolidated entities	186			4,018			4,630
Foreign exchange gain (loss)	(36		)	(96		)	250
Other expense	(870		)	(1,088		)	(1,429		)
Interest income	157			331			616
Interest expense	(3,619		)	(5,431		)	(6,196		)
Income before provision for income taxes	92,104			96,733			55,675
Provision for income taxes	(33,837		)	(38,174		)	(22,059		)
Net income	$	58,267		$	58,559		$	33,616
Less net income attributable to noncontrolling interests	$	(1,511	)	—			—
Net income attributable to Primoris	$	56,756		$	58,559		$	33,616
Dividends per common share	$	0.12		$	0.11		$	0.10
Earnings per share attributable to Primoris:
Basic	$	1.10		$	1.15		$	0.79
Diluted	$	1.10		$	1.14		$	0.72
Weighted average common shares outstanding:
Basic	51,391			50,707			42,694
Diluted	51,406			51,153			46,878

See accompanying notes.

F-4

PRIMORIS SERVICES CORPORATION

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In Thousands, Except Share Amounts)

																Accumulated
								Additional						Non		Other			Total
	Common Stock				Preferred Stock			Paid-in			Retained			Controlling		Comprehensive			Stockholders’
	Shares		Amount		Shares		Amount	Capital			Earnings			Interest		Income			Equity
Balance, December 31, 2009	32,704,903		$	3	81,852.78		$	$	100,644		$	42,982		$	—	$	330		$	143,959
Net income	—		—		—		—	—			33,616			—		—			33,616
Issuance of common shares to Former Primoris owners	2,499,975		—		—		—	—			—			—		—			—
Stock issued for the purchase of Cravens Services, Inc.	74,906		—		—		—	600			—			—		—			600
Warrant exercises	4,337,909		1		—		—	21,688			—			—		—			21,689
Dividends — common	—		—		—		—	—			(4,413		)	—		—			(4,413		)
Dividends — preferred	—		—		—		—	—			(204		)	—		—			(204		)
Conversion of James Construction Group preferred to common shares	8,185,278		1		(81,852.78	)	—	—			—			—		—			1
Stock to foreign managers	—		—		—		—	390			—			—		—			390
Buyback of warrants	—		—		—		—	(277		)	—			—		—			(277		)
Foreign currency hedge effect	—		—		—		—	—			—			—		(330		)	(330		)
Cancelled shares for sale of foreign subsidiary	(49,080	)	—		—		—	(400		)	—			—		—			(400		)
Stock issued for the purchase of Rockford Corporation	1,605,709		—		—		—	13,600			—			—		—			13,600
Balance, December 31, 2010	49,359,600		$	5	—		$	$	136,245		$	71,981		$	—	$	—		$	208,231
Net income	—		—		—		—	—			58,559			—		—			58,559
Issuance of earnout shares to James Construction Group/Rockford sellers	1,589,741		—		—		—	14,800			—			—		—			14,800
Issuance of shares to employees and directors	109,791		—		—		—	988			—			—		—			988
Dividends	—		—		—		—	—			(5,616		)	—		—			(5,616		)
Purchase of units from EarlyBirdCapital	—		—				—	(2,030		)	—			—		—			(2,030		)
Balance, December 31, 2011	51,059,132		$	5	—		$	$	150,003		$	124,924		$	—	$	—		$	274,932
Net income	—		—		—		—	—			56,756			1,511		—			58,267
Issuance of shares to employees and directors	139,465		—		—		—	2,173			—			—		—			2,173
Issuance of shares to sellers of Sprint	62,052		—		—		—	980			—			—		—			980
Issuance of earnout shares to Rockford sellers	232,637		—		—		—	3,450			—			—		—			3,450
Dividends	—		—		—		—	—			(6,163		)	—		—			(6,163		)
Repurchase of stock	(89,600	)	—		—		—	(1,001		)	—			—		—			(1,001		)
Balance, December 31, 2012	51,403,686		$	5	—		$	$	155,605		$	175,517		$	1,511	$	—		$	332,638

See accompanying notes.

F-5

PRIMORIS SERVICES CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands)

	Year Ended December 31,
	2012			2011			2010
Cash flows from operating activities:
Net income	$	58,267		$	58,559		$	33,616
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation	29,080			24,104			17,904
Amortization of intangible assets	6,543			9,699			6,580
Goodwill and intangible impairment	—			—			1,732
Loss (gain) on sale of property and equipment	(2,752		)	335			(1,359		)
Income from non-consolidated entities	(186		)	(4,018		)	(4,630		)
Distributions received from non-consolidated entities	1,358			10,136			9,491
Net deferred tax liabilities (assets)	(879		)	7,453			(1,091		)
Changes in assets and liabilities:
Customer retention deposits and restricted cash	(3,887		)	(18,972		)	(5,673		)
Accounts receivable	(52,092		)	20,767			(42,148		)
Costs and estimated earnings in excess of billings	5,426			(24,591		)	(3,765		)
Other current assets	(1,341		)	(6,654		)	(6,837		)
Other long term assets	—
Accounts payable	34,338			17,241			12,391
Billings in excess of costs and estimated earnings	20,639			(67,539		)	55,825
Contingent earnout liabilities	(1,435		)	2,927			290
Accrued expenses and other current liabilities	3,176			3,318			5,375
Other long-term liabilities	2,138			6,735			4,147
Net cash provided by operating activities	98,393			39,500			81,848
Cash flows from investing activities:
Purchase of property and equipment	(37,395		)	(29,052		)	(23,640		)
Proceeds from sale of property and equipment	9,035			3,443			2,967
Purchase of short-term investments	(6,869		)	(36,000		)	(44,000		)
Sale of short-term investments	26,428			39,000			48,058
Investment in non-consolidated entities	—			—			(18,065		)
Cash paid for acquisitions	(86,207		)	—			(39,120		)
Cash acquired with acquisitions	—			—			19,623
Net cash used in by investing activities	(95,008		)	(22,609		)	(54,177		)
Cash flows from financing activities:
Proceeds from issuance of long-term debt	94,471			44,000			27,500
Repayment of capital leases	(9,021		)	(6,282		)	(4,600		)
Repayment of long-term debt	(26,633		)	(22,329		)	(12,696		)
Repayment of subordinated debt	(17,501		)	(20,710		)	(27,001		)
Purchase of Unit Purchase Option	—			(2,030		)	—
Proceeds from issuance of common stock for warrants	—			—			21,690
Proceeds from issuance of common stock purchased by management under long-term incentive plan	1,240			647			—
Stock issued to foreign managers	—			—			390
Repurchase of warrants	—			—			(277		)
Repurchase of common stock	(1,001		)	—			—
Dividends paid	(7,695		)	(5,318		)	(4,404		)
Cash distributions to former James shareholders	—			—			(1,966		)
Net cash provided by (used in) financing activities	33,860			(12,022		)	(1,364		)
Cash flows from discontinued operations — Operating activities	—			—			(874		)
Net change in cash and cash equivalents	37,245			4,869			25,433
Cash and cash equivalents at beginning of year	120,306			115,437			90,004
Cash and cash equivalents at end of the year	$	157,551		$	120,306		$	115,437

See accompanying notes.

F-6

PRIMORIS SERVICES CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

(In Thousands)

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

	Year Ended December 31,
	2012			2011		2010
Cash paid during the year for:
Interest	$	3,004		$	4,765	$	6,131
Income taxes, net of refunds received	$	31,404		$	33,600	$	26,794
Components of cash paid for acquisitions:
Cash acquired	$	—		$	—	$	19,623
Fair value of assets acquired	136,146			—		141,570
Common stock issued	(980		)	—		(13,600		)
Contingent liabilities	(15,598		)	—		(14,272		)
Notes payable issued	—			—		(16,712		)
Cash/stock payment due sellers after closing	(605		)	—		—
Liabilities assumed	(32,756		)	—		(77,489		)
Cash paid for acquisitions	$	86,207		$	—	$	39,120

SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITIES

	Year Ended December 31,
	2012		2011		2010
Obligations incurred for the purchase of property and equipment	$	2,932	$	5,312	$	—
Dividends declared and not yet paid	$	—	$	1,532	$	1,234

See accompanying notes.

F-7

PRIMORIS SERVICES CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Dollars in thousands, except per share amounts

Note 1—Nature of Business

Organization and operations —Primoris Services Corporation is a holding company of various subsidiaries, which collectively are engaged in various construction and product engineering activities. The Company’s underground and directional drilling operations install, replace and repair natural gas, petroleum, telecommunications and water pipeline systems, including large diameter pipeline systems. The Company’s industrial, civil and engineering operations build and provide maintenance services to industrial facilities including power plants, petrochemical facilities, and other processing plants; construct multi-level parking structures; and engage in the construction of highways, bridges and other environmental construction activities. The Company is incorporated in the State of Delaware and in 2011 moved its corporate headquarters from Lake Forest, California to 2100 McKinney Avenue, Suite 1500, Dallas, Texas 75201.

The wholly-owned subsidiaries of Primoris include ARB, Inc. (“ARB”), ARB Structures, Inc., All Day Electric Company, Inc., OnQuest, Inc., Cardinal Contractors, Inc., Stellaris, LLC, James Construction Group LLC (“JCG”), Rockford Corporation (“Rockford”), Primoris Energy Services Corporation (“PES”) and Q3 Contracting, Inc (“Q3C”).

Primoris has been acquisitive over the last several years expanding both service capabilities and geographic footprint.  The acquisitions include:

·On December 18, 2009, we acquired JCG.  JCG is one of the largest general contractors based in the Gulf Coast states and is engaged in highway, industrial and environmental construction, primarily in Louisiana, Texas and Florida.

·On November 8, 2010, the Company acquired Rockford, which specializes in construction of large diameter natural gas and liquid pipeline projects and related facilities.

·During 2012, the Company made four acquisitions:

a.On March 12, 2012, the Company’s subsidiary, PES, purchased the assets of Sprint Pipeline Services, L.P. (“Sprint”) headquartered in Pearland (outside Houston), Texas.  Sprint provides a comprehensive range of pipeline construction, maintenance, upgrade, fabrication and specialty services primarily in the southeastern United States.  As part of the purchase, PES has the right to use the name of Sprint for a three year period.

b.On May 30, 2012, the Company’s subsidiary JCG, purchased certain of the assets of Silva Contracting Company, Inc., Tarmac Materials, LLC and C3 Interest, LLC (collectively “Silva”).  Silva provides transportation infrastructure maintenance, asphalt paving, and material sales in the Gulf Coast region of the United States.

c.On September 28, 2012, the Company purchased the assets of The Saxon Group (“Saxon”).  Based outside of Atlanta, Georgia, Saxon is a full service industrial construction enterprise with special expertise in the industrial gas processing and power plant sectors.

d.On November 17, 2012, the Company acquired Q3C Contracting, Inc.  Q3C specializes in small diameter pipeline and gas distribution construction, restorative and other services, primarily in the upper Midwest region of the United States.

In 2011, the Company entered into a joint venture agreement and formed Blythe Power Constructors for the installation of a parabolic trough solar field and steam generation system in California.

The Company’s common stock trades on the NASDAQ Select Global Market under the symbol “PRIM”.  In February 2008, Primoris Corporation (referred to as “Former Primoris”), a privately-held company, entered into an Agreement and Plan of Merger with Rhapsody Acquisition Corp. (“Rhapsody”), a publicly-held company.  Rhapsody was founded as a special purpose acquisition company in 2006, to affect a business combination with an operating business. In July 2008, the merger was completed and Rhapsody changed its name to “Primoris Services Corporation”.

Unless specifically noted otherwise, as used throughout these consolidated financial statements, “Primoris”, “the Company”, “we”, “our”, “us” or “its” refers to the business, operations and financial results of the Company and its wholly-owned subsidiaries.   Reclassifications have been made to prior year financial statement presentation to conform to the current year presentation.

Seasonality—Primoris’ results of operations are subject to quarterly variations. Some of the variation is the result of weather, particularly rain and snow, which can impact Primoris’ ability to perform construction services. While the majority of the Company’s work is in the southern half of the United States, these seasonal impacts affect revenues and profitability since gas and other utilities defer routine replacement and repair during their period of peak demand.  In addition, demand for new projects tends to be lower during the early part of the year due to clients’ internal budget cycles.  As a result, the Company usually experiences higher revenues and earnings in the third and fourth quarters of the year as compared to the first two quarters.

F-8

The Company is also dependent on large construction projects which tend not to be seasonal, but can fluctuate from year to year based on general economic conditions.  Because of the cyclical nature of its business, the financial results for any period may fluctuate from prior periods, and the Company’s financial condition and operating results may vary from quarter-to-quarter.  Results from one quarter may not be indicative of its financial condition or operating results for any other quarter or for an entire year.

Note 2—Summary of Significant Accounting Policies

Basis of presentation—The accompanying consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and the financial statement rules and regulations of the Securities and Exchange Commission (“SEC”).  References for Financial Accounting Standards Board (“FASB”) standards are made to the FASB Accounting Standards Codification (“ASC”).

Reclassifications have been made to prior year financial statement presentation to conform to the current year presentation.

Principles of consolidation—The accompanying Consolidated Financial Statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

Use of estimates—The preparation of the Company’s Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could materially differ from those estimates. Significant estimates are made for costs to complete construction projects which have a direct effect on gross profit as reported in these consolidated financial statements.

Operating cycle— In the accompanying consolidated balance sheets, assets and liabilities relating to long-term construction contracts are included as current assets and current liabilities, since they are expected to be realized or liquidated in the normal course of contract completion, although completion may require more than one calendar year.

Cash and cash equivalents—The Company considers all highly liquid investments with an original maturity of three months or less when purchased as cash equivalents.

Short term investments—The Company classifies as short term investments all securities or other assets acquired which have ready marketability and can be liquidated, if necessary, within the current operating cycle and which have readily determinable fair values. Short term investments are classified as available for sale and are recorded at fair value using the specific identification method. Currently, the majority of the Company’s short-term investments are in short-term dollar-denominated bank deposits and other four to six month certificates of deposits (“CDs”) through the CDARS (Certificate of Deposit Account Registry Service) process and Treasury Bills in order to provide FDIC backing of the investments.

Customer retention deposits—Customer retention deposits consist of contract retention payments made by customers into escrow cash accounts with a bank. Investments for these amounts are limited to highly graded U.S. and municipal government debt obligations, investment grade commercial paper and CDs, which limits credit risk on these balances. Escrow cash accounts are released to the Company by customers as projects are completed in accordance with contract terms.

Inventory and uninstalled contract materials—Inventory consists of expendable construction materials and small tools that will be used in construction projects and is valued at the lower of cost, using first-in, first-out method, or market.  Uninstalled contract materials include certain job specific materials not yet installed which are valued using the specific identification method.

Business combinations—Business combinations are accounted for using the acquisition method of accounting. Expenses incurred in connection with a business combination are expensed as incurred.  Changes in deferred tax asset valuation allowances and acquired tax uncertainties after the measurement period are recognized in net income.

Goodwill and other intangible assets—The Company accounts for goodwill and other indefinite-lived intangible assets in accordance with ASC Topic 350 “Intangibles — Goodwill and Other”.  Under ASC Topic 350, goodwill and certain indefinite-lived intangible assets are not amortized but are subject to an annual impairment test as of the first day of the fourth quarter of each year, with more frequent testing if indicators of potential impairment exist.  The impairment review is performed at the reporting unit level for those units with recorded goodwill.  During the fourth quarter of 2010, the Company determined that the recorded value of the Cravens acquisition intangible assets and goodwill was impaired and recorded an impairment charge of $1,700.  There were no other impairments of goodwill or intangible assets during the periods presented.

F-9

At December 31, 2012, goodwill is recorded at our reporting units as follows:

·James Construction Group, East Construction Services segment, $59,259;

·Rockford, West Construction Services segment, $32,079;

·Q3C Contracting, Inc., West Construction Services segment, $12,562;

·Sprint (a subsidiary of PES), East Construction Services segment, $9,389;

·Born Canada, Engineering segment, $2,441;

·The Saxon Group (a subsidiary of PES), East Construction Services segment, $810; and

·Cardinal Contractors, East Construction Services segment, $401.

In September 2011, the FASB issued ASU 2011-08, Intangibles — Goodwill and Other (Topic 350): Testing Goodwill or Impairment (“ASU 2011-08”). ASU 2011-08 provides an option to assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If an entity determines that the fair value is not less than its carrying amount, then it is not necessary to perform the two-step impairment test.  An entity can choose to perform the qualitative assessment on none, some or all of its reporting units.  An entity can also bypass the qualitative assessment for any reporting unit in any period and proceed directly to step one of the impairment test, and then resume performing the qualitative assessment in any subsequent period.  ASU 2011-08 also includes new qualitative indicators that replace those currently used to determine whether an interim goodwill impairment test is required to be performed. On January 1, 2012, the Company adopted this standard which did not have a material impact on the Company’s financial position, results of operations or cash flows.

In July 2012, the FASB issued ASU 2012-02, Intangibles — Goodwill and Other (Topic 350):  Testing Indefinite-Lived Intangible Assets for Impairment (“ASU 2012-02”).  ASU 2012-02 allows an organization the option of first assessing qualitative factors to determine if a quantitative impairment test of the indefinite-lived intangible asset is necessary.  If the qualitative assessment reveals that it is “more likely than not” that the asset is impaired, a calculation of the asset’s fair value is required.  Otherwise, no quantitative calculation, as outlined in Subtopic 350-30 is necessary.  The Company adopted this standard on October 1, 2012, the date of the Company’s impairment review.  The adoption of ASU 2012-02 did not have a material impact on the Company’s financial position, results of operations or cash flows.

Income tax— Current income tax expense is the amount of income taxes expected to be payable for the current year. A deferred income tax liability or asset is established for the expected future tax consequences resulting from the differences in financial reporting and tax basis of assets and liabilities between GAAP and the tax codes. A valuation allowance is provided if it is more likely than not that some or all of the deferred tax assets will not be realized. In addition to valuation allowances, the Company provides for uncertain tax positions when such tax positions do not meet the recognition thresholds or measurement standards as set forth in ASC Topic 740 regarding accounting for uncertainty in income taxes. Amounts for uncertain tax positions are adjusted in periods when new information becomes available or when positions are effectively settled. The Company recognizes accrued interest and penalties related to uncertain tax positions, if any, as a component of income tax expense.

Comprehensive income—The Company accounts for comprehensive income in accordance with ASC Topic 220 “Comprehensive Income”, which specifies the computation, presentation and disclosure requirements for comprehensive income (loss). During the reported periods herein, such amounts were not significant.

General matters—The Company has significant working capital invested in assets that may have a liquidation period extending beyond one year. The Company has claims receivable and retention due from various customers and others that are currently in dispute, the realization of which is subject to binding arbitration, final negotiation or litigation. Although management believes that it will be successful in collecting these amounts, the amounts ultimately collected upon final resolution of these matters may materially differ from the carrying value currently presented in the accompanying consolidated balance sheet.

Foreign operations—At December 31, 2012, the Company had operations in Canada with assets aggregating approximately $10,335, compared to $9,385 at December 31, 2011.

Functional currencies and foreign currency translation—Through a subsidiary, the Company maintains foreign operations in Canada.  The Company uses the United States dollar as its functional currency in Canada, as substantially all monetary transactions are made in dollars, and other significant economic facts and circumstances currently support that position. As these factors may change, the Company periodically assesses its position with respect to the functional currency of its foreign subsidiary.  Included in other income are foreign exchange losses of $36 in 2012, losses of $96 in 2011 and gains of $250 in 2010.

Partnerships and joint ventures — As is normal in the construction industry, the Company is periodically a member of a partnership or a joint venture.  These partnerships or joint ventures are used primarily for the execution of single contracts or projects.  The Company’s ownership can vary from a small noncontrolling ownership to a significant ownership interest.  The Company evaluates each partnership or joint venture to determine whether the entity is considered a variable interest entity (“VIE”) as defined in FASB ASC Topic 810, and if a VIE, whether the Company is the primary beneficiary of the VIE, which would require the Company to consolidate the VIE with the Company’s financial statements.  When consolidation occurs, the Company accounts for the interests of the other parties as a noncontrolling interest and discloses the net income attributable to noncontrolling interests.

F-10

At December 31, 2012, the Company consolidated the financial results of one VIE, Blythe Power Constructors (“Blythe”), a joint venture formed for the installation of a parabolic trough solar field and steam generation system in California.  For Blythe, net income attributable to the Company and the net income attributable to the noncontrolling interest owners are presented on the Consolidated Statement of Earnings.  Other financial information is presented in Note 13 - Noncontrolling Interests.

Equity method accounting— If the Company is not the primary beneficiary of a VIE or does not have a controlling interest, the Company accounts for its noncontrolling interest using the equity method of accounting per ASC Topic 323.  Such entity is recorded at cost and the carrying amount is adjusted periodically to recognize the Company’s proportionate share of income or loss, additional contributions made and dividends and capital distributions received.  The Company also recognizes its share of any impairment charge recorded by the investee.  The Company will consider the effect of an other than temporary decrease in the value of the investment if there is a basis difference in the assets of the investee.

In the event a partially owned equity affiliate were to incur a loss and the Company’s cumulative proportionate share of the loss exceeded the carrying amount of the equity method investment, application of the equity method would be suspended and the Company’s proportionate share of further losses would not be recognized unless the Company committed to provide further financial support to the affiliate. The Company would resume application of the equity method once the affiliate became profitable and the Company’s proportionate share of the affiliate’s earnings equals the Company’s cumulative proportionate share of losses that were not recognized during the period the application of the equity method was suspended.

In December 2011, the Company recognized its proportionate share of an impairment charge taken by the WesPac Energy LLC equity investment and recorded a basis adjustment in the investment.  See Note 8 — “Equity Method Investments”.

Cash concentration—The Company places its cash in short term U.S. Treasury bonds, in CDs and with several other financial institutions. As of December 31, 2012 and 2011, the Company had cash balances of $157.6 million and $120.3 million, respectively.  At December 31, 2012, the $157.6 million consisted of $4.6 million held in Treasury bill funds and $153.0 million with various financial institutions that are backed by the federal government FDIC program.  At December 31, 2011, the $120.3 million of cash consisted of $28.0 million held in short-term CDARS, $4.6 million in Treasury bill funds and $87.7 million was held with various financial institutions that are backed by the federal government FDIC program.

Collective bargaining agreements—Approximately 37% of the Company’s hourly employees, primarily consisting of field laborers, were covered by collective bargaining agreements. Upon renegotiation of such agreements, the Company could be exposed to increases in hourly costs and work stoppages. Of the 72 collective bargaining agreements to which the Company is a party to, nineteen will require renegotiation during 2013.

Multiemployer plans —The Company participates and contributes to a number of multiemployer benefit plans for its union employees at rates determined by the various collective bargaining agreements.  Each plan’s trustees determine the eligibility and allocations of contributions and benefit amounts, determine the types of benefits and administer the plan.  If the Company were to withdraw from a plan, the multiemployer benefit plan requires satisfaction of a withdrawal obligation.  Any potential withdrawal obligation may be material.  Any withdrawal liability would be recorded when it is probable that a liability exists and can be reasonably estimated, in accordance with GAAP.

In November 2011, the Company withdrew from the Central States Southeast and Southwest Areas Pension Fund multiemployer pension plan and recorded a $5 million withdrawal liability as of December 31, 2011.  In 2012, the Company increased the estimated withdrawal liability balance to $7.5 million, recording an expense of $2.5 million.  At this time, the Company has no plans to withdraw from any other agreements.  See Note 17 — Multiemployer Plans

Worker’s compensation insurance—The Company self-insures worker’s compensation claims to a certain level. The Company maintained a self-insurance reserve totaling $16,547 and $13,809 at December 31, 2012 and 2011, respectively. The amount is included in “accrued expenses and other current liabilities” on the accompanying consolidated balance sheets. Claims administration expenses are charged to current operations as incurred. Future actual payments may materially differ from these reserves.

Fair value of financial instruments—The consolidated financial statements include financial instruments for which the fair value may differ from amounts reflected on a historical basis. Financial instruments of the Company consist of cash, accounts receivable, short-term investments, accounts payable and certain accrued liabilities.  These financial instruments generally approximate fair market value based on the short-term nature of these instruments.  The carrying value of the Company’s long-term debt approximates fair value based on comparison with current prevailing market rates for loans of similar risks and maturities.

F-11

In May 2011, the FASB issued ASU No. 2011-04, Fair Value Measurement: Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS, which provides amendments to FASB ASC Topic 820, Fair Value Measurement. The objective of ASU 2011-04 is to create common fair value measurement and disclosure requirements between GAAP and International Financial Reporting Standards (“IFRS”). The amendments clarify existing fair value measurement and disclosure requirements and make changes to particular principles or requirements for measuring or disclosing information about fair value measurements.  On January 1, 2012, the Company adopted ASU 2011-04 which did not have a material impact on its consolidated financial statements.

Accounts receivable—Contract receivables are primarily concentrated from public and private companies and governmental agencies located throughout the United States and Canada. Credit terms for payment of products and services are extended to customers in the normal course of business and no interest is charged. Contract receivables are generally progress billings on projects, and as a result, are short term in nature.  The Company requires no collateral from its customers, but follows the practice of filing statutory liens or stop notices on all construction projects when collection problems are anticipated. The Company uses the allowance method of accounting for losses from uncollectible accounts. Under this method an allowance is provided based upon historical experience and management’s evaluation of outstanding contract receivables at the end of each year. Receivables are written off in the period deemed uncollectible. The allowance for doubtful accounts at December 31, 2012 and 2011 was $432 and $363, respectively.

Revenue recognition—Historically, substantial portions of the Company’s revenues have been generated under fixed-price contracts. Fixed-price contracts carry certain inherent risks, including underestimation of costs, problems with new technologies and economic and other changes that may occur over the contract period. The Company recognizes revenues using the percentage-of-completion method for fixed-price contracts, which may result in uneven and irregular results. Unforeseen events and circumstances can alter the estimate of the costs and potential profit associated with a particular contract.  Total estimated costs, and thus contract revenues and income, can be impacted by changes in any of the following:  productivity, scheduling, the unit cost of labor, subcontracts, materials and equipment. Additionally, external factors such as weather, client needs, client delays in providing permits and approvals, labor availability, governmental regulation and politics may affect the progress of a project’s completion and thus the timing of revenue recognition.  To the extent that original cost estimates are modified, estimated costs to complete increase, delivery schedules are delayed, or progress under a contract is otherwise impeded, cash flow, revenue recognition and profitability from a particular contract may be adversely affected.

In the percentage-of-completion method, estimated revenues and resulting contract income is calculated based on the total costs incurred to date as a percentage of total estimated costs. If an estimate of total contract cost indicates a loss on a contract, the projected loss is recognized in full at the time of the estimate.  The full loss amount is recognized as an “accrued loss provision” on the balance sheet.  As the percentage-of-completion method is used to calculate revenues, the accrued loss provision is changed so that the gross profit for the contract is zero.

Other contract forms—In addition, the Company also uses unit-price, time and material, and cost reimbursable plus fee contracts.  For these jobs, revenue is recognized based on contractual terms.  For example, time and material contract revenues are recognized based on purchasing and employee time records.  Similarly, unit price contracts recognize revenue based on accomplishment of specific units at a specified unit price.

For all of its contracts, the Company includes the provision for estimated losses on uncompleted contracts in accrued expenses. The provision for estimated losses on uncompleted contracts was $764 and $917 for the years ended December 31, 2012 and 2011, respectively. Changes in job performance, job conditions and estimated profitability, including those arising from final contract settlements, may result in revisions to costs and income. These revisions are recognized in the period in which the revisions are determined. Claims are included in revenues when realization is probable and amounts can be reliably determined. Revenues in excess of contract costs incurred on claims are recognized only when the amounts have been paid.

The caption “Costs and estimated earnings in excess of billings” represents unbilled receivables which arise when revenues have been recorded but the amount cannot be billed under the terms of the contract until a later date.  Balances may represent:  (a) unbilled amounts arising from the use of the percentage-of-completion method of accounting, (b) incurred costs to be billed under cost reimbursement type contracts, or (c) amounts arising from routine lags in billing.  For those contracts in which billings exceed contract revenues recognized to date, excesses are included in the caption “Billings in excess of costs and estimated earnings”.

The Company considers unapproved change orders to be contract variations for which Primoris has customer approval for a scope change but a price change associated with the scope change has not yet been agreed upon.  Costs associated with unapproved change orders are included in the estimated cost to complete the contracts and are treated as project costs as incurred. The Company recognizes revenue equal to costs incurred on unapproved change orders when realization of price approval is probable and the estimated revenue amount is equal to or greater than the costs related to the unapproved change order. Unapproved change orders involve the use of estimates, and it is reasonably possible that revisions to the estimated costs and recoverable amounts may be required in future reporting periods to reflect changes in estimates or final agreements with customers.

F-12

The Company considers claims to be amounts Primoris seeks, or will seek, to collect from customers or others for customer-caused changes in contract specifications or design, or other customer-related causes of unanticipated additional contract costs on which there is no agreement with customers on both scope and price changes. Revenue from claims is recognized when agreement is reached with customers as to the value of the claims, which in some instances may not occur until after completion of work under the contract. Costs associated with claims are included in the estimated costs to complete the contracts and are treated as project costs when incurred.

In accordance with applicable terms of construction contracts, certain retainage amounts may be withheld by customers until completion and acceptance of the project.  Final payments of the majority of retainage may not be made until the following operating cycle.

Significant revisions in contract estimates—As previously discussed, revenue recognition is based on the percentage-of-completion method for firm fixed-price contracts. Under this method, the costs incurred to date as a percentage of total estimated costs are used to calculate the revenue to be recognized. Total estimated costs, and thus contract income, are impacted by many factors.

For projects that are in process in the prior year, but are either completed or continue to be in process during the current year, there can be a difference in revenues and profits related to the prior year, had current year estimates of costs to complete been known in the prior year.

During the year ended December 31, 2012, certain contracts had revisions in estimates from those projected in 2011.  If the revised estimates as of December 31, 2012 had been applied in the prior year, the gross profit earned on these contracts would have resulted in an increase of approximately $8,185 in gross profit in 2011, or approximately $0.10 per diluted share.   Similarly, the revised estimates as of December 31, 2011 had been applied in the prior year; the gross profit earned on these contracts would have resulted in an increase of approximately $10,244 in 2010, or approximately $0.12 per diluted share.  In addition, the revised estimates for the year ended December 31, 2010 would have resulted in a gross profit increase of approximately $9,892 in the year 2009, or approximately $0.13 per diluted share.

Customer concentration — The Company operates in multiple industry segments encompassing the construction of commercial, industrial and public works infrastructure assets throughout primarily the United States. Typically, the top ten customers in any one calendar year generate revenues in excess of 50% of total revenues; however in most years a different group make up the top ten customers.

For the years ended December 31, 2012 and 2011, revenues generated by the top ten customers were $862.3 million and $1,000 million, respectively, which represented 55.9% and 68.5%, respectively, of total revenues during the periods.

During the years ending December 31, 2012 and 2011, the Louisiana DOT represented 11.1% and 16.4%, respectively, of total revenues and a large gas and electric utility represented 14.6% and 11.3%, respectively, of total revenues. During the year ending December 31, 2012 and 2011, revenues generated by Rockford under the Ruby contract were $12.6 million and $274.9 million, respectively, which represented 0.8% and 18.8%, respectively, of total revenues during the periods.  The Ruby contract was part of a large project for the construction of a natural gas pipeline from Wyoming to Oregon for which field work was substantially completed in 2011.

At December 31, 2012, approximately 10.0% of the Company’s accounts receivable were due from one customer, and that customer provided 14.6% of the Company’s revenues during 2012.  At December 31, 2011, approximately 15.5% of the Company’s accounts receivable were due from one customer, and that customer provided 11.3% of the Company’s revenues during 2011.

Property and equipment—Property and equipment are recorded at cost and are depreciated using the straight-line method over the estimated useful lives of the related assets, usually ranging from three to thirty years. Maintenance and repairs are charged to expense as incurred. Significant renewals and betterments are capitalized. At the time of retirement or other disposition of property and equipment, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is reflected in operations.

The Company assesses the recoverability of property and equipment by determining whether the depreciation of property and equipment over its remaining life can be recovered through projected undiscounted future cash flows. The amount of property and equipment impairment if any, is measured based on fair value and is charged to operations in the period in which property and equipment impairment is determined by management. As of December 31, 2012 and 2011, the Company’s management has not identified any material impairment of its property and equipment.

F-13

Taxes collected from customers—Taxes collected from the Company’s customers are recorded on a net basis.

Share-based payments and stock-based compensation—In July 2008, the shareholders approved and the Company adopted the Primoris Services Corporation 2008 Long-term Incentive Equity Plan (“2008 Equity Plan”).   Under the terms of the 2008 Equity Plan, the Company issued 111,790 shares of stock in 2012 and 94,966 shares of stock in 2011, purchased by our employees who are participants in the Primoris Long-term Retention Plan.  The shares have a six-month restriction on any trades.  As part of the quarterly compensation of the non-employee members of the Board of Directors, the Company issued 27,675 shares of common stock during 2012 and 14,825 shares of common stock during 2011 under the 2008 Equity Plan.  The shares were fully vested and have a one-year restriction on any trades.  As of December 31, 2012, there were 1,270,744 shares of common stock reserved to provide for the grant and exercise of all future stock option issuances, stock appreciation rights (“SARS”) and grants of restricted shares under the 2008 Equity Plan.

Under guidance of ASC Topic 718 “Compensation — Stock Compensation”, stock-based compensation cost is measured at the date of grant, based on the calculated fair value of the stock-based award, and is recognized as expense over the employee’s requisite service period (generally the vesting period of the award).

Contingent Earnout Liabilities—As part of recent acquisitions, the Company has agreed to issue additional shares of common stock, or makes payments of cash, to the sellers upon meeting certain operating performance targets for certain periods subsequent to the acquisition date.  Each period, the Company evaluates the fair value of the estimated contingency and records a non-operating charge for the change in the fair value.  Upon meeting the target, the Company reflects the full liability on the balance sheet and records as a charge to selling, general and administration expense for the change in the fair value of the liability from the prior period.  The liability will be settled by issuing the agreed upon values of stock or amount of cash to be paid, as determined by the purchase agreement.

In March 2011, the Company issued 1,095,646 shares of common stock to the sellers of JCG after achieving a specific operating performance target for 2010.

The Rockford 2011 earnout target was achieved in 2011 and the Company reflected the liability on the balance sheet at December 31, 2011.  The liability was settled by issuing 232,637 shares of common stock to the sellers and making a cash payment of $3.45 million in April 2012.  The Rockford 2012 earnout target was achieved in 2012 and the Company reflected the liability on the balance sheet at December 31, 2012.  The liability will be settled by making a cash payment of $6.9 million in March 2013.

As part of the Sprint acquisition in March 2012, the Company agreed to issue additional cash to the sellers upon meeting certain operating performance targets for 2012 and 2013.  The Sprint 2012 earnout target was achieved in 2012 and a $4.0 million liability was recorded on the balance sheet at December 31, 2012.  The liability will be settled by making a cash payment in March 2013.

Derivative instruments and hedging activities—From time to time, the Company utilizes foreign currency hedge agreements to manage its Canadian currency exchange exposures, which are accounted for in accordance with ASC Topic 815 “Derivatives and Hedging”.  During the twelve months ended December 31, 2012 and 2011, the Company had no derivative financial instruments.

Recently Issued Accounting Pronouncements

Fair Value Disclosures

In May 2011, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2011-04, Fair Value Measurement: Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS, which provides amendments to FASB ASC Topic 820, Fair Value Measurement. The objective of ASU 2011-04 is to create common fair value measurement and disclosure requirements between GAAP and International Financial Reporting Standards (“IFRS”). The amendments clarify existing fair value measurement and disclosure requirements and make changes to particular principles or requirements for measuring or disclosing information about fair value measurements.  On January 1, 2012, the Company adopted ASU 2011-04, which did not have a material impact on its consolidated financial statements.

F-14

Goodwill Impairment Testing

In September 2011, the FASB issued ASU 2011-08, Intangibles — Goodwill and Other (Topic 350): Testing Goodwill or Impairment (“ASU 2011-08”).  ASU 2011-08 provides an option to assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If an entity determines that the fair value is not less than its carrying amount, then it is not necessary to perform the two-step impairment test.  An entity can choose to perform the qualitative assessment on none, some or all of its reporting units.  An entity can also bypass the qualitative assessment for any reporting unit in any period and proceed directly to step one of the impairment test, and then resume performing the qualitative assessment in any subsequent period.  ASU 2011-08 also includes new qualitative indicators that replace those currently used to determine whether an interim goodwill impairment test is required to be performed. On January 1, 2012, the Company adopted this standard which did not have a material impact on the Company’s financial position, results of operations or cash flows.

Intangible Asset Impairment Testing

In July 2012, the FASB issued ASU 2012-02, Intangibles — Goodwill and Other (Topic 350):  Testing Indefinite-Lived Intangible Assets for Impairment (“ASU 2012-02”).  ASU 2012-02 allows an organization the option of first assessing qualitative factors to determine if a quantitative impairment test of the indefinite-lived intangible asset is necessary.  If the qualitative assessment reveals that it is “more likely than not” that the asset is impaired, a calculation of the asset’s fair value is required.  Otherwise, no quantitative calculation, as outlined in Subtopic 350-30 is necessary.  ASU 2012-02 is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012.  The Company adopted this standard on October 1, 2012, the date of the Company’s annual impairment review.  The adoption of ASU 2012-02 did not have a material impact on the Company’s financial position, results of operations or cash flows.

Note 3—Fair Value Measurements

ASC Topic 820, “Fair Value Measurements and Disclosures” defines fair value, establishes a framework for measuring fair value in GAAP and requires certain disclosures about fair value measurements.  ASC Topic 820 addresses fair value GAAP for financial assets and financial liabilities that are re-measured and reported at fair value at each reporting period and for non-financial assets and liabilities that are re-measured and reported at fair value on a non-recurring basis.

In general, fair values determined by Level 1 use quoted prices (unadjusted) in active markets for identical assets or liabilities. Fair values determined by Level 2 inputs use data points that are observable such as quoted prices, interest rates and yield curves. Fair values determined by Level 3 inputs are “unobservable data points” for the asset or liability and include situations where there is little, if any, market activity for the asset or liability.

The following table presents, for each of the fair value hierarchy levels identified under ASC Topic 820, the Company’s financial assets and certain liabilities that are required to be measured at fair value at December 31, 2012 and 2011:

			Fair Value Measurements at Reporting Date
	Amount Recorded on Balance Sheet		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Assets as of December 31, 2012:
Cash and cash equivalents	$	157,551	$	157,551	—	—
Short-term investments	$	3,441	$	3,441	—	—
Liabilities as of December 31, 2012:
Contingent consideration	$	—	—		—	$	23,431
Assets as of December 31, 2011:
Cash and cash equivalents	$	120,306	$	120,306	—	—
Short-term investments	$	23,000	$	23,000	—	—
Liabilities as of December 31, 2011:
Contingent consideration	$	—	—		—	$	12,718

Short-term investments consist primarily of Certificates of Deposit (“CDs”) purchased through the CDARS (Certificate of Deposit Account Registry Service) process and U.S. Treasury bills with various financial institutions that are backed by the federal government FDIC program.

Other financial instruments of the Company consist of accounts receivable, accounts payable and certain accrued liabilities.  These financial instruments generally approximate fair value based on their short-term nature.  The carrying value of the Company’s long-term debt approximates fair value based on comparison with current prevailing market rates for loans of similar risks and maturities.

F-15

The following table provides a rollforward of the Company’s contingent consideration liability level three fair value measurements (see Note 4) during the year ended December 31, 2012:

	Significant Unobservable Inputs (Level 3)
Contingent Consideration
Balance at December 31, 2011	$	12,718
Additions:
Sprint acquisition	6,200
Saxon acquisition	1,950
Q3C acquisition	7,448
Change in fair value of contingent consideration	2,015
Reductions:
Contingent consideration payment to Rockford sellers	(6,900		)
Balance at December 31, 2012	$	23,431

The Company assesses the estimated fair value of the contractual obligation to pay the contingent consideration on a quarterly basis and any changes in estimated fair value are recorded as a non-operating charge in the Company’s statement of operations.  Fluctuations in the fair value of contingent consideration are impacted by two unobservable inputs, management’s estimate of the probability (which are greater than 75%) of the acquired company meeting the contractual operating performance target and the estimated discount rate (a rate that approximates the Company’s cost of capital). Significant increases (decreases) in either of those inputs in isolation would result in a significantly higher (lower) fair value measurement.  Generally, a change in the assumption used for the probability of meeting the performance target is accompanied by a directionally similar change in the fair value of contingent consideration liability, whereas a change in assumption used for the estimated discount rate is accompanied by a directionally opposite change in the fair value of contingent consideration liability.

Note 4—Business Combinations

2012 Acquisition — Sprint Pipeline Services, L.P.

On March 12, 2012, the Company executed an asset purchase agreement with Sprint Pipeline Services, L.P. (“Sprint”).  Headquartered in Pearland (outside Houston), Texas, Sprint provides a comprehensive range of pipeline construction, maintenance, upgrade, fabrication and specialty services primarily in the southeastern United States.  The Company formed PES to make the acquisition.  The purchase agreement allows the Company to use the Sprint name for three years.  For 2012, Sprint contributed revenues of $92,470 and gross profit of $15,614 and have been included in the Company’s consolidated financial statements.

The fair value of the consideration transferred to selling shareholders consisted of the following:

Cash consideration	$	21,197
Company common stock	980
Earnout consideration	6,200
Total consideration	$	28,377

On the closing date, we paid the sellers $19,228 in cash and in the second quarter paid an additional $1,969 once a final valuation of the net book value of assets purchased was completed.

We issued the sellers 62,052 unregistered shares of our common stock with a contractually agreed upon value of $1,000 based on the average closing price of our common stock for the 20 business days prior to the closing date.  The fair value of the stock issued was $980 based on the stock price on the closing date.

Acquisition costs related to the Sprint acquisition of $94 were expensed in the year ended December 31, 2012.

Sprint Earnout Consideration

As part of the acquisition, the Company agreed to issue additional cash to the sellers, contingent upon Sprint meeting certain operating performance targets for the remainder of 2012 and for the twelve months ending December 31, 2013.

If income before interest, taxes, depreciation and amortization (“EBITDA”) for 2012, as defined in the stock purchase agreement, was at least $7,000, we agreed to pay $4,000 in cash to the sellers.  The estimated fair value of the 2012 contingent consideration was $3,455 on the acquisition date.

F-16

The Company determined that the 2012 earnout target was achieved and recorded the full value of the $4,000 liability on the balance sheet at December 31, 2012.  As a result, a charge of $200 was recorded in Selling, General and Administration expense in 2012.  In March 2013, the liability should be settled by making a $4,000 cash payment to the sellers.

The 2013 earnout target provides for an additional cash payment of $4,000 to the sellers if 2013 EBITDA is at least $7,750.  The estimated fair value of the 2013 potential contingent consideration as of the acquisition date was $2,745 and at December 31, 2012, the estimated fair value was $3,020.

2012 Acquisition — Silva Companies

On May 30, 2012, JCG executed an asset purchase agreement with Silva Contracting Company, Inc., Tarmac Materials, LLC and C3 Interests, LLC (collectively, “Silva”).  Based outside of Houston, Texas, Silva provides transportation infrastructure maintenance, asphalt paving and material sales in the Gulf Coast region of the United States.  On the closing date, we paid the sellers $13,934 and paid an additional $156 in December 2012.   After the acquisition, the operations for Silva were merged into JCG.  Acquisition costs related to the Silva acquisition of $93 were expensed in the year ended December 31, 2012

2012 Acquisition — The Saxon Group

On September 28, 2012, PES executed an asset purchase agreement with The Saxon Group (“Saxon”).  Based in Suwannee, Georgia, outside of Atlanta, Saxon is a full service industrial construction enterprise with special expertise in the industrial gas processing and power plant sectors.  We paid the sellers $550 in cash and paid off an outstanding note for $2,429 on behalf of Saxon, a total cash payment of $2,979.  For 2012, Saxon has contributed revenues of $7,460 and a gross margin loss of $46 and have been included in the Company’s consolidated financial statements.

Acquisition costs related to the Saxon acquisition of $14 were expensed in the year ended December 31, 2012.

Saxon Earnout Consideration

As part of the acquisition, the Company agreed to issue additional cash of $2,500 to the sellers, contingent upon Saxon meeting certain operating performance targets.  The Company agreed to pay $2,500 in cash to the sellers if they achieve one of the following two targets:  (1) EBITDA for the fifteen month period ending December 31, 2013 of at least $4,000 or; (2) EBITDA for the twenty-one month period ending June 30, 2014 of at least $4,750.  The estimated fair value of the potential contingent consideration on the acquisition date was $1,950 and at December 31, 2012, the estimated fair value was $2,028.

2012 Acquisition — Q3 Contracting

On November 17, 2012, the Company purchased all of the issued and outstanding shares of stock of Q3C, a privately-held Minnesota corporation.  The sellers elected to treat the acquisition under Section 338(h)(10) of the Internal Revenue Code which allows the Company to account for the transaction as an asset purchase.  Based in Little Canada, Minnesota, north of St. Paul, Minnesota, Q3C specializes in small diameter pipeline and gas distribution construction and other services, primarily in the upper Midwest region of the United States.  For 2012, Q3C has contributed revenues of $12,755 and gross profit of $1,408 and have been included in the Company’s consolidated financial statements.

The fair value of the consideration transferred to selling shareholders consisted of the following:

Cash consideration	$	48,116
Commitment to issue Company common stock	430
Earnout consideration	7,448
Total consideration	$	55,994

On the closing date, we paid the sellers $48,116 in cash.  The Company also agreed to issue $430 of Company common stock, to be valued based on the average December 2012 closing price.  An adjustment for the fair value of the stock at December 31, 2012 was not material.  The Company issued 29,273 shares of unregistered common stock in February 2013.

F-17

Q3C Earnout Consideration

As part of the acquisition, the Company agreed to issue additional cash to the sellers, contingent upon Q3C meeting certain operating performance targets.  The targets are based on the achievement of meeting certain levels of Q3C’s EBITDA, as that term is defined in the stock purchase agreement.  The targets are as follows:

1.If EBITDA for the period November 18, 2012 through December 31, 2013 is at least $17,700, the Company agreed to pay $3,750 in cash to the sellers, with an additional cash payment of $1,250 if EBITDA exceeds $19,000.

2.If EBITDA for the calendar year 2014 is at least $19,000, the Company agreed to pay $3,750 in cash to the sellers, with an additional cash payment of $1,250 if EBITDA exceeds $22,000.

The fair value of the contingent consideration was estimated to be $7,450 as of the purchase date and is included on the Company’s balance sheet as a liability.  The fair value is based on management’s evaluation of the probability of Q3C meeting the EBITDA targets for the two periods, discounted at the Company’s estimated average cost of capital.  The estimated fair value at December 31, 2012 was $7,490.

Acquisition costs related to the Q3C acquisition of $129 were expensed in the year ended December 31, 2012.

2010 Acquisition - Rockford Holdings Corporation

On November 8, 2010, the Company entered into a stock purchase agreement to acquire the stock of privately-held Rockford Corporation (“Rockford”).  Upon completion of the acquisition on November 12, 2010, Rockford became a wholly-owned subsidiary.  Based in Hillsboro (Portland), Oregon, Rockford specializes in construction of large diameter natural gas and liquid pipeline projects and related facilities.

Rockford’s results of operations and estimated fair value of assets acquired and liabilities assumed have been included in the Company’s consolidated financial statements from November 1, 2010.  While November 12, 2010 was considered the acquisition date, the net change between November 1, 2010 and the acquisition date was not material.  For the period November 1, 2010 to December 31, 2010 Rockford revenues were $85,309, income before provision for income taxes of $8,218 and net income was $4,962.  Acquisition costs related to the acquisition of $360 were expensed in the year ended December 31, 2010.

Rockford Merger Consideration

The fair value of the consideration provided to the sellers as of the acquisition date of November 12, 2010 consisted of the following:

Cash	$	35,039
Company common stock	13,600
Subordinated promissory note	16,712
Earnout consideration	14,272
Total fair value of consideration	$	79,623

Details of the consideration follow:

Cash — On the closing date, the Company paid the sellers $35,039 in cash with $400 of the cash placed in an escrow account (the “Escrow Account”).  At December 31, 2012, the amount remained in the Escrow Account, pending final resolution of a dispute, as described below.

Company Stock —The Company issued the sellers shares of unregistered common stock with a value of $12,476.  The shares were based on an average closing price of our common stock for the 20 business days prior to the closing date.  We issued to the sellers 1,605,709 shares of common stock based on a contractually calculated value of $7.77 per share, with a fair value of $13,600 based on the stock price on the closing date.

Subordinated Promissory Note — The Company entered into an unsecured promissory note in favor of the sellers (the “Rockford Note”) with a principal amount of $16,712.  The principal amount of the Rockford Note was divided into two portions.  Approximately $9,669 on the Rockford Note was designated as “Note A” and approximately $7,043 of the Rockford Note was designated as “Note B.”  Note B was paid in full on March 10, 2011.  On the date of acquisition, management believed the face amount of the Rockford Note approximated fair value.

Note A is due and payable on October 31, 2013 and bears interest at different rates until maturity.  As a result of a dispute related to a certain liability at the time of the closing of the transaction and as provided for under the terms of the purchase agreement, the Company placed $5,000 in an interest bearing escrow account in lieu of making future payments of that amount to the note holders.  The Company included this escrow amount on its December 31, 2012 and 2011 balance sheet as “customer retention deposits and restricted cash”.

F-18

The Company ceased further principal and interest payments in May 2012, when the outstanding balance reached $5,000.  The balance was reclassified on the Company’s balance sheet from notes payable to accrued liabilities in September 2012.  In December 2012, the parties came to a resolution whereby the Company would pay $1,500 to the subordinated note holders out of the Escrow Account, the remaining to be remitted to the Company.  As a result, the Company reduced its liability to $1,500 and recorded $3,500 as a reduction of SG&A expense and reversed the accrued interest $400.  Final payment from the Escrow Account is expected to be made in the first quarter 2013.

Rockford Earnout Consideration

As part of the acquisition, the Company agreed to issue additional cash and common stock to the sellers, contingent upon Rockford meeting certain operating performance targets for the fourth quarter 2010, for the five quarters ending December 31, 2011 and for the year ended December 31, 2012.  The maximum amount of this consideration was $18,400 which when measured on a fair value basis as of the acquisition date, was estimated at $14,300 and was classified as a liability in the Company’s consolidated balance sheet.

The 2010 earnout target for the fourth quarter 2010 was achieved, and in March 2011, the Company issued 494,095 unregistered shares of common stock to the sellers.

The 2011 earnout target was achieved and the liability as of December 31, 2011 was $6,900.  In April 2012, the Company issued 232,637 unregistered shares of common stock to the sellers and made a cash payment of $3,450.

The final contingent earnout liability for 2012 was based on Rockford’s 2012 financial performance.  At December 31, 2011, the fair value of the liability reflected on the balance sheet was $5,818 and the fair value was adjusted quarterly during 2012.  In the fourth quarter 2012, the Company determined that the 2012 earnout target was achieved and recorded the full $6,900 liability at December 31, 2012.  As a result, an additional charge of $345 was recorded in Selling, General and Administration expense in 2012.  In March 2013, the Company anticipates making the $6,900 cash payment to the sellers.

Schedule of Assets Acquired and Liabilities Assumed for 2012 and 2010 Acquisitions

The 2012 acquisitions of Sprint, Silva, Saxon and Q3C and the 2010 acquisition of Rockford are accounted for under the acquisition method of accounting. Accordingly, assets acquired and liabilities assumed were measured at their estimated fair value at the acquisition date.

The following table summarizes the fair value of the assets acquired and the liabilities assumed:

	2012												2010
	Sprint			Silva			Saxon			Q3C			Rockford
	Acquisition			Acquisition			Acquisition			Acquisition			Acquisition
Cash	$	—		$	—		$	—		$	—		$	19,623
Accounts receivable	7,614			903			2161			17,947			57,505
Cost and earnings in excess of billings	601			23			279			4,358			2,132
Inventory and other assets	252			353			564			131			—
Investment in non-consolidated entities	—			—			—			1,298			—
Deferred tax assets	—			—			—			—			3,383
Prepaid expenses	—			—			—			174			813
Property, plant and equipment	12,078			14,675			2,948			20,526			24,107
Other assets	—			—			—			—			2,400
Intangible assets	3,600			—			1350			21,550			15,510
Goodwill	9,389			—			810			12,562			32,079
Accounts payable	(1,458		)	(1,450		)	(2,952		)	(4,448		)	(14,525		)
Billing in excess of costs and earnings	—			(414		)	(110		)	—			(35,408		)
Accrued expenses	(716		)	—			(121		)	(7,851		)	(13,324		)
Notes payable	—			—			—			(10,253		)	(4,684		)
Capital lease liabilities	(2,983		)	—			—			—			—
Deferred tax liability	—			—			—			—			(9,988		)
Total	$	28,377		$	14,090		$	4,929		$	55,994		$	79,623

F-19

During the fourth quarter of 2012, the Company finalized its estimates of the fair value of the acquired assets and liabilities of Silva and Saxon.  There were no changes to the amounts reported in the June 30, 2012 Form 10Q for Silva.  The estimates for the Q3C acquisition are preliminary and subject to change.  For the Saxon acquisition, the final revisions resulted in a change of the amounts reported in the September 30, 2012 Form 10Q.  The change resulted in a decrease of $451 in property, plant and equipment, a decrease of $155 for accounts receivable, an increase of $564 in prepaid expenses and a decrease of other working capital of $168.  Intangible assets were also decreased by $600 and goodwill was increased by $810.  These adjustments have been reflected in the December 31, 2012 financial statements.

Identifiable Tangible Assets.  Significant identifiable tangible assets acquired include accounts receivable, costs and earnings in excess of billings for projects, inventory and fixed assets, consisting primarily of construction equipment, for each of the acquisitions. The Company determined that the recorded value of accounts receivable, costs and earning in excess of billings and inventory reflect fair value of those assets. The Company estimated the fair value of fixed assets on the effective dates of the acquisitions using a market approach, based on comparable market values for similar equipment of similar condition and age.

Identifiable Intangible Assets.  We used the assistance of an independent third party valuation specialist to determine the fair value of the intangible assets acquired for the acquisitions.  The fair value measurements of the intangible assets were based primarily on significant unobservable inputs and thus represent a Level 3 measurement as defined in Note 3 — “Fair Value Measurements”. Based on the Company’s assessment, the acquired intangible asset categories, fair value and average amortization periods, generally on a straight-line basis, are as follows:

		2012 Fair Value						2010 Fair Value
	Amortization	Sprint		Saxon		Q3C		Rockford
	Period	Acquisition		Acquisition		Acquisition		Acquisition
Tradename	3 & 10 years	$	700	$	—	$	6,650	$	7,450
Non-compete agreements	2 to 5 years	450		100		450		2,100
Customer relationships	5 to 15 years	2,450		1,150		14,450		2,750
Backlog	0.75 years	—		100		—		3,210
Total		$	3,600	$	1,350	$	21,550	$	15,510

The fair value of the tradename was determined based on the “relief from royalty” method.  A royalty rate was selected based on consideration of several factors, including external research of third party trade name licensing agreements and their royalty rate levels, and management estimates.  The three year useful life for Sprint was based on the purchase agreement providing for the use of the Sprint tradename for three years. The useful life was estimated at 10 years for Q3C and Rockford based on management’s expectation for continuing value of the tradename in the future.

The fair value for the non-compete agreements was valued based on a discounted “income approach” model, including estimated financial results with and without the non-compete agreements in place.  The agreements were analyzed based on the potential impact of competition that certain individuals could have on the financial results, assuming the agreements were not in place.  An estimate of the probability of competition was applied and the results were compared to a similar model assuming the agreements were in place.

The customer relationships and the Rockford backlog were valued utilizing the “excess earnings method” of the income approach.  The estimated discounted cash flows associated with existing customers and projects were based on historical and market participant data.  Such discounted cash flows were net of fair market returns on the various tangible and intangible assets that are necessary to realize the potential cash flows.

Goodwill.  Goodwill largely consists of expected benefits from the geographic expansion and presence of the various acquisitions in the United States, including the Gulf Coast region from Sprint and Saxon, the Pacific Northwest area from Rockford and the upper Midwest region of the United States from Q3C. Goodwill is also attributable to Sprint’s energy-related opportunities for specialized pipeline construction and related services, Saxon’s expertise in the industrial gas processing and power plant sectors, and Rockford and Q3C with their expanded pipeline and service capabilities, as well as the opportunity to extend our infrastructure operations and other synergies of the combined companies.  Goodwill also includes the value of the assembled workforce of the various acquired businesses.  The fair value of the consideration for the Silva acquisition was equal to the fair value of the fixed assets and net working capital acquired, and management established that there were no intangible assets or goodwill attributable to the purchase.

F-20

Based on the current tax treatment of the acquisitions, the goodwill and other intangible assets associated with the Sprint, Saxon and Q3C acquisitions are deductible for income tax purposes over a fifteen-year period.  Since the Rockford acquisition was a stock purchase, the goodwill of $32,079 is not deductible for income tax purposes on a yearly basis.

Supplemental Unaudited Pro Forma Information

In accordance with ASC 805, we are combining the 2012 acquisitions of Sprint, Silva, Saxon and the Q3C acquisition information.  The following pro forma information presents the results of operations of the 2012 acquisitions as if they all occurred on January 1, 2011.  The supplemental pro forma information has been adjusted to include:

·the pro forma impact of amortization of intangible assets and depreciation of property, plant and equipment, based on the fair values assigned to the purchased assets;

·the pro forma impact of the expense associated with the amortization of the discount for the fair value of the contingent consideration for potential earnout liabilities that may be achieved in 2012, 2013 and future periods for the acquisitions.

·the pro forma tax effect of both the income before income taxes and the pro forma adjustments, calculated using a tax rate of 39% for the applicable periods; and

·the pro forma increase in weighted average shares outstanding includes 62,052 unregistered shares of common stock issued as part of the Sprint acquisition.

The pro forma results are presented for illustrative purposes only and are not necessarily indicative of or intended to represent the results that would have been achieved had the transactions been consummated as of  January 1, 2011.  The pro forma results do not reflect any operating efficiencies and associated cost savings that the Company might have achieved with respect to the combined companies.

	2012		2011
	(unaudited)		(unaudited)
Revenues	$	1,673,001	$	1,674,406
Income before provision for income taxes	$	95,254	$	90,799
Net income attributable to Primoris	$	58,678	$	54,940
Weighted average common shares outstanding:
Basic — (1)	51,403		50,769
Diluted — (1)	51,418		51,215
Earnings per share attributable to Primoris:
Basic	$	1.14	$	1.08
Diluted	$	1.14	$	1.07

Note 5—Accounts Receivable

The following is a summary of accounts receivable at December 31:

	2012		2011
Contracts receivable, net of allowance for doubtful accounts of $432 and $363 for 2012 and 2011, respectively	$	227,548	$	166,298
Retention	39,710		20,378
	267,258		186,676
Due from affiliates	—		—
Other accounts receivable	837		702
	$	268,095	$	187,378

F-21

Amounts “due from affiliates” primarily relate to amounts due from related parties (See Note 8 “Equity Method Investments” and Note 20 “Related Party Transactions”) for the performance of construction contracts.  At December 31, 2012 and 2011, there were no amounts due from affiliates.  Contract revenues earned from related parties were approximately $502, $5,681 and $1,568 for the years ended December 31, 2012, 2011 and 2010, respectively.

Note 6—Costs and Estimated Earnings on Uncompleted Contracts

Costs and estimated earnings on uncompleted contracts consist of the following at December 31:

	2012			2011
Costs incurred on uncompleted contracts	$	3,882,968		$	2,977,535
Accrued loss provision for estimated losses on uncompleted contracts	764			917
Gross profit recognized	448,928			303,634
	4,332,660			3,282,086
Less: billings to date	(4,449,851		)	(3,377,949		)
	$	(117,191	)	$	(95,863	)

This net amount is included in the accompanying consolidated balance sheet at December 31 under the following captions:

	2012			2011
Costs and estimated earnings in excess of billings	$	41,701		$	41,866
Billings in excess of cost and estimated earnings	(158,892		)	(137,729		)
	$	(117,191	)	$	(95,863	)

Note 7—Property and Equipment

The following is a summary of property and equipment at December 31:

	2012			2011			Useful Life
Land and buildings	$	24,358		$	18,987		30 years
Leasehold improvements	17,530			5,597			Lease life
Office equipment	2,092			1,203			3 - 5 years
Construction equipment	197,200			158,978			3 - 7 years
Transportation equipment	48,649			28,475			3 - 18 years
	289,829			213,240
Less: accumulated depreciation and amortization	(104,989		)	(83,591		)
Net property and equipment	$	184,840		$	129,649

Note 8—Equity Method Investments

WesPac Energy LLC

On July 1, 2010, the Company acquired a 50% membership interest in WesPac Energy LLC, a Nevada limited liability company (“WesPac”), from Kealine Holdings, LLC (“Kealine”), a Nevada limited liability company.  Kealine holds the remaining 50% membership interest in WesPac.  We have no future obligation to make any additional investments into WesPac. All key investment, management and operating decisions of WesPac require unanimous approval from a management committee equally represented by Kealine and us.  The Company believes the ownership interest in WesPac will broaden our exposure to a variety of pipeline, terminal and energy-related infrastructure opportunities across North America.

F-22

The following is a summary of the financial position and results as of and for the period ended December 31:

	2012			2011
WesPac Energy, LLC
Balance sheet data:
Assets	$	16,896		$	20,147
Liabilities	1,063			1,820
Net assets	$	15,833		$	18,327
Company’s equity investment in affiliate	$	11,463		$	12,415
Earnings data:
Revenue	$	552		$	1,717
Expenses	2,455			9,303
Earnings before taxes	$	(1,903	)	$	(7,586	)
Company’s equity in earnings	$	(952	)	$	(3,793	)

In December 2012, WesPac expensed $1,100 for three abandoned projects and the Company recorded its 50% share of the expense.

At the end of 2011, a major oil refining third party terminated two potential projects.  WesPac expensed $5,400 in 2011.  In December 2011, the Company recorded its 50% share of expenses required by the equity method of accounting and reduced its $5,000 basis difference by $1,700 to recognize an estimate for an other than temporary decrease in the value of its basis difference between the Company’s original investment and its pro-rata share of the WesPac equity.

St. — Bernard Levee Partners

The Company acquired a 30% interest in St. — Bernard Levee Partners (“Bernard”) in the fourth quarter 2009 and accounts for this investment under the equity method.  Bernard engages in construction activities in Louisiana. Bernard distributed $4,200 and $36,955 to its equity holders during the twelve months ended December 31, 2012 and 2011, respectively, of which the Company’s share, as calculated under the joint venture agreement, was $1,260 and $10,022 for the same periods in 2012 and 2011, respectively.  The following is a summary of the financial position and results as of and for the years ended December 31:

	2012		2011
St. Bernard Levee Partners
Balance sheet data:
Assets	$	592	$	5,677
Liabilities	86		4,771
Net assets	$	506	$	906
Company’s equity investment in affiliate	$	150	$	272
Earnings data:
Revenue	$	4,026	$	72,822
Expenses	227		39,650
Earnings before taxes	$	3,799	$	33,172
Company’s equity in earnings	$	1,138	$	9,415

Alvah, Inc.

On November 17, 2012, the Company acquired a 49% membership interest in Alvah, Inc., a California corporation (“Alvah”), as part of the acquisition of Q3 Contracting, Inc.  Alvah is engaged in electrical contracting activities, primarily in Northern California and worked as a subcontractor for ARB prior to and after the acquisition. In December 2012, Alvah distributed $200, of which the Company’s share was $98.  During 2012, payments made to Alvah as a subcontractor by ARB and Q3C amounted to $6,377 and $537, respectively.

Note 9—Intangible Assets

At December 31, 2012 and 2011, intangible assets totaled $51,978 and $32,021, respectively, net of amortization.   The December 31, 2012 balance includes the effect of four acquisitions during 2012 (See Note 4).  The table below summarizes the intangible asset categories, amounts and the average amortization periods which are generally on a straight-line basis, at December 31:

	Amortization		Amount
	Period		2012		2011
Tradename	3 and 10 years		$	23,586	$	18,791
Non-compete agreements	2 to 5 years		4,130		4,695
Customer relationships	5 to 15 years		24,212		8,181
Backlog	0.75 years		50		354
		Total	$	51,978	$	32,021

F-23

Amortization expense of intangible assets was $6,543, $9,699 and $6,580 for the years ended December 31, 2012, 2011 and 2010, respectively.  Estimated amortization expense for intangible assets as of December 31, 2012 is as follows:

For the Years Ending December 31,	Estimated Intangible Amortization Expense
2013	$	7,020
2014	6,986
2015	5,834
2016	5,330
2017	5,318
Thereafter	21,490
	$	51,978

Note 10—Accounts Payable and Accrued Liabilities

At December 31, 2012 and 2011, accounts payable includes retention amounts of approximately $15,946 and $13,980, respectively.  These amounts due to subcontractors have been retained pending contract completion and customer acceptance of jobs.

The following is a summary of accrued expenses and other current liabilities at December 31:

	2012		2011
Payroll and related employee benefits	$	33,086	$	29,110
Insurance, including self-insurance reserves	22,982		18,732
Reserve for estimated losses on uncompleted contracts	764		917
Corporate income taxes and other taxes	3,779		1,546
Accrued overhead cost	2,007		1,819
Current liabilities of discontinued operations	133		733
Other	13,401		7,066
	$	76,152	$	59,923

Note 11—Capital Leases

The Company leases vehicles and certain equipment under capital leases. The economic substance of the leases is that the Company is financing the acquisition of vehicles and equipment through leases and accordingly, they are recorded in the Company’s assets and liabilities. Included in depreciation expense is amortization of vehicles and equipment held under capital leases, amortized over their useful lives on a straight-line basis.  As part of the November 12, 2010 Rockford acquisition, vehicles and equipment with a fair value of $12,501 were acquired and the related capital lease obligations were assumed.

At December 31, 2012 and 2011, the net book value of assets under capital leases was $10,382 and $12,304, respectively. The following is a schedule by year of the future minimum lease payments required under capital leases together with their present value as of December 31:

2013	$	3,921
2014	2,736
2015	1,141
2016	105
Total minimum lease payments	$	7,903
Amounts representing interest	(339		)
Net present value of minimum lease payments	7,564
Less: current portion of capital lease obligations	(3,733		)
Long-term capital lease obligations	$	3,831

F-24

Note 12—Credit Arrangements

Credit facilities and long-term debt consist of the following at December 31:

	2012			2011
Commercial notes payable to a bank with interest rates from 2.16% to 4.12%. Monthly principal and interest payments are due in the amount of $518, with the final payment due December 23, 2016. The notes are secured by certain construction and automotive equipment of the Company	$	18,988		$	26,243
Commercial note payable to a bank with an interest rate of 4.71%. Principal and interest payments are due in the amount of $140 per month until the maturity date on July 1, 2017. The note is secured by certain construction equipment of the Company	6,800			8,125
Construction equipment note payable to a commercial equipment finance company, with an interest rate of 3.67% per annum. Principal and interest payments are due in the amount of $101 per month until the maturity date on December 31, 2017. The note is secured by certain construction equipment of the Company	5,550			6,543
Commercial notes payable to a bank with interest rates from 2.63% to 3.50%. Monthly principal and interest payments are due in the amount of $226, with the final payment due June 15, 2017. The notes are secured by certain construction and automotive equipment of the Company	10,441			12,811
Construction equipment note payable to a commercial equipment finance company, with an interest rate of 2.14% per annum. Principal and interest payments are due in the amount of $281 per month until the maturity date on November 30, 2016. The note is secured by certain construction equipment of the Company	12,935			16,000
Construction equipment notes payable to a commercial equipment finance company, with an interest rate of 2.23% to 2.44% per annum. Principal and interest payments are due in the amount of $294 per month until the maturity date on November 1, 2019. These notes are secured by certain construction and automotive equipment of the Company	21,713			—
Commercial notes payable to a commercial equipment finance company, with an interest rate of 2.05% to 3.51% per annum. Principal and interest payments are due in the amount of $193 per month until the maturity date on December 21, 2019. The notes are secured by certain construction equipment and real estate of the Company	17,800			—
Construction equipment note payable to a commercial equipment finance company, with an interest rate of 2.06% per annum. Principal and interest payments are due in the amount of $68 per month until the maturity date on August 13, 2017. The note is secured by certain construction equipment of the Company	3,586			—
Senior Secured Notes payable to an insurance finance company, with an interest rate of 3.65% per annum. Quarterly interest payments are due starting March 31, 2013. Principal repayments start on December 28, 2016 until the maturity date on December 28, 2022. The notes are secured by the assets of the Company	50,000			—
Total long-term debt	147,813			69,722
Less: current portion	(19,446		)	(13,870		)
Long-term debt, net of current portion	$	128,367		$	55,852

Scheduled maturities of long-term debt are as follows:

	Year Ending December 31,
2013	$	19,446
2014	20,002
2015	18,605
2016	25,116
2017	15,286
Thereafter	49,358
	$	147,813

F-25

Credit Agreements

Revolving Credit Facility

On December 28, 2012, the Company entered into a revolving credit facility (the “Credit Agreement”), by and among the Company, The PrivateBank and Trust Company, as administrative agent (the “Administrative Agent”) and co-lead arranger, The Bank of the West, as co-lead arranger and IBERIABANK Corporation (the “Lenders”). The Credit Agreement is a $75 million revolving credit facility whereby the lenders agree to make loans on a revolving basis from time to time and to issue letters of credit for up to the $75 million committed amount. The Credit Agreement also provides for an incremental facility of up to $50 million. The termination date of the Credit Agreement is December 28, 2017.

The principal amount of any loans under the Credit Agreement will bear interest at either: (i) LIBOR plus an applicable margin as specified in the Credit Agreement (based on the Company’s senior debt to EBITDA ratio), or (ii) the Base Rate (which is the greater of (a) the Federal Funds Rate plus 0.5% or (b) the prime rate as announced by the Administrative Agent). Quarterly non-use fees, letter of credit fees and administrative agent fees are payable by the Company at rates specified in the Credit Agreement.

The principal amount of any loan drawn under the Credit Agreement may be prepaid in whole or in part, with a minimum prepayment of $5 million, at any time, potentially subject to make-whole provisions.

The Credit Agreement includes customary restrictive covenants for facilities of this type, as discussed below.

Other than commercial letters of credit amounting to $4,808, there were no borrowings under this line of credit during the twelve months ended December 31, 2012, leaving available borrowing capacity at $70,192.

As part of the execution of the Credit Agreement described above, the previous Loan and Security Agreement dated October 29, 2009, as amended, between the Company and The Private Bank and Trust Company (the “PrivateBank Agreement”), was terminated. The Company was in compliance with the bank covenants at the time of the termination and there were no penalties or fees incurred as a result of the termination. There were no borrowings outstanding at the time of the termination and all letter of credit amounts issued and outstanding under the terminated agreement were transferred to the Lenders under the Credit Agreement discussed above.

In 2011, the Company entered into an agreement with Bank of the West whereby the Company agrees to maintain a cash balance at the bank equal to the full amount of certain commercial letters of credit.  The agreement was terminated and all the remaining liabilities were transferred to the Credit Agreement discussed above.

Senior Secured Notes and Shelf Agreement

On December 28, 2012, the Company also entered into a $50 million Senior Secured Notes purchase (“Senior Notes”) and a $25 million private shelf agreement (the “Notes Agreement”) by and among the Company and The Prudential Investment Management, Inc. and certain Prudential affiliates (the “Noteholders”).

A total of $50 million in Senior Notes was funded on December 28, 2012. The Senior Notes are due December 28, 2022 and bear interest at an annual rate of 3.65%, paid quarterly in arrears. Annual principal payments of $7.1 million are required beginning December 28, 2016 through December 28, 2021 with a final payment due on December 28, 2022. The principal amount may be prepaid in whole or in part, with a minimum prepayment of $5 million, at any time, subject to make-whole provisions.

The Notes Agreement provides for the issuance of additional notes of up to $25 million, during the first three years of the Notes Agreement with maturity dates no more than 10 years from the date issued, at the market interest rate for notes with equivalent terms and conditions.

All loans made under both the Credit Agreement and the Notes Agreement are secured by our assets, including, among others, our cash, inventory, goods, equipment (excluding equipment subject to permitted liens) and accounts receivable. All of our domestic subsidiaries have issued joint and several guaranties in favor of the Lenders and Noteholders for all amounts under the Credit Agreement and Notes Agreement.

Both the Credit Agreement and the Notes Agreement contain various restrictive and financial covenants including among others, minimum tangible net worth, senior debt/EBITDA ratio, debt service coverage requirements and a minimum balance for unencumbered net book value for fixed assets. In addition, the agreements include restrictions on investments, change of control provisions and provisions in the event the Company disposes more than 20% of its total assets.

The Company was in compliance with the bank covenants as of December 31, 2012.

F-26

Canadian Credit Facility

The Company has a credit facility with a Canadian bank for purposes of issuing commercial letters of credit in Canada, for an amount of up to $10,000 in Canadian dollars. The credit facility has an annual renewal and provides for the issuance of commercial letters of credit for a term of up to five years. The facility provides for an annual fee of 1% for any issued and outstanding commercial letters of credit. Letters of credit can be denominated in either Canadian or U.S. dollars. At December 31, 2012 and 2011, commercial letters of credit outstanding under this credit facility totaled $1,364 and $4,036 in Canadian dollars, respectively.  At December 31, 2012, the available borrowing capacity under this credit facility was $8,636 in Canadian dollars.  The credit facility contains a working capital restrictive covenant for our Canadian subsidiary, Born Heaters Canada.  At December 31, 2012, the Company was in compliance with the bank covenants.

Subordinated Promissory Note — Rockford.   In connection with the 2010 acquisition of Rockford, the Company executed an unsecured promissory note (the “Rockford Note”).

As a result of a dispute related to a certain liability at the time of the closing of the transaction, the Company ceased making principal and interest payments in May 2012, when the outstanding balance reached $5,000.  The balance was reclassified on the Company’s balance sheet from notes payable to accrued liabilities in September 2012.

In December 2012, the parties came to a resolution whereby the Company would pay $1,500 to cancel the subordinated note.  Final payment is expected in the first quarter of 2013.

Subordinated Promissory Note — JCG.   In connection with the acquisition of JCG, the Company executed an unsecured promissory note (the “JCG Note”) on December 18, 2009 in favor of the sellers of JCG with an initial principal amount of $53,500. The JCG Note was due and payable on December 15, 2014 and bore interest at differing rates until maturity.  The JCG note was paid in full on March 12, 2012.

Note 13 — Noncontrolling Interests

The Company applies the provisions of ASC Topic 810-10-45, which establishes accounting and reporting standards for ownership interests of parties other than the Company in subsidiaries, such as joint ventures and partnerships,.

The Company determined that the Blythe joint venture was a variable interest entity (“VIE”) and that the Company was determined to be the primary beneficiary as a result of its significant influence over the joint venture operations. Revenues for the Blythe joint venture for the year ended December 31, 2012 were $25,769 and net income attributable to noncontrolling interests in the Blythe joint venture was $1,511.  Since Blythe is a partnership, no tax effect was recognized for the income.  There was no material operating activity for the project during the year ended December 31, 2011.  There were no distributions to noncontrolling interests and no capital contributions made by noncontrolling interests during the years ended December 31, 2012 or 2011.

At December 31, 2012, the carrying value of the assets and liabilities associated with the operations of the Blythe joint venture included $3,565 of cash, $8,843 of accounts receivable and current liabilities of $9,379.  As of December 31, 2011, the carrying value of the assets and liabilities associated with the Blythe joint venture was $2,546 and $2,540, respectively. The net assets of the joint venture are restricted for use by the project and are not available for general operations of the Company.

Note 14—Commitments and Contingencies

Leases—The Company leases certain property and equipment under non-cancelable operating leases which expire at various dates through 2019.  The leases require the Company to pay all taxes, insurance, maintenance, and utilities and are classified as operating leases in accordance with ASC Topic 840 “Leases”.  Leases identified below as related party leases represent property with entities related through common ownership by stockholders, officers, and directors of the Company.

The future minimum lease payments required under non-cancelable operating leases are as follows:

For the Years Ending December 31,	Real Property		Real Property (Related Party)		Equipment		Total Commitments
2013	$	2,728	$	1,597	$	7,207	$	11,532
2014	2,001		1,563		6,041		9,605
2015	1,829		941		4,539		7,309
2016	1,465		775		2,418		4,658
2017	1,392		786		483		2,661
Thereafter	2,944		2,308		—		5,252
	$	12,359	$	7,970	$	20,688	$	41,017

F-27

Total lease expense during the years ended December 31, 2012, 2011 and 2010 amounted to approximately $10,684, $9,530 and $9,856, respectively, including amounts paid to related parties of $1,342, $1,278 and $1,151, respectively.

Withdrawal liability for multiemployer pension plan—In November 2011, Rockford, ARB and Q3C, along with other members of the Pipe Line Contractors Association (“PLCA”), withdrew from the Central States Southeast and Southwest Areas Pension Fund multiemployer pension plan (the “Plan”). In connection with the withdrawal, the Company has recorded an estimated liability of $7,500 based on information provided by the Plan. The Company withdrew from the Plan in order to mitigate its liability in connection with the Plan, which is significantly underfunded. The Plan has asserted that the PLCA members did not affect a withdrawal in 2011, although the Company believes that a legally effective withdrawal occurred in November 2011 and has recorded the withdrawal liability on that basis. If the Plan were to prevail in its assertion and the withdrawal of the Company were deemed to occur after 2011, the amount of any withdrawal liability would be expected to increase

Letters of credit—As of December 31, 2012 and 2011 the Company had total letters of credit outstanding of approximately $6,168 and $11,798, respectively.  The outstanding amounts include the U.S. dollar equivalents for letters of credit issued in Canadian dollars.

Litigation—The Company is subject to claims and legal proceedings arising out of its business. Management believes that the Company has meritorious defenses to the claims. Although management is unable to ascertain the ultimate outcome of such matters, after review and consultation with counsel and taking into consideration relevant insurance coverage and related deductibles, management believes that the outcome of these matters will not have a materially adverse effect on the consolidated financial position of the Company.

Bonding—As of December 31, 2012, 2011 and 2010, the Company had bid and completion bonds issued and outstanding totaling approximately $1,298,589, $1,105,933 and $849,288, respectively.

Contingent Consideration—Earnouts related to acquisitions as discussed in Note 4

Note 15—Reportable Operating Segments

The Company segregates the business into three operating segments: the East Construction Services segment, the West Construction Services segment and the Engineering segment.

Range of Services — East and West Construction Services

Both the East Construction Services and the West Construction Services segments specialize in a range of services that include designing, building/installing, replacing, repairing/rehabilitating and providing management services for construction related projects. Our services include:

·Providing installation of underground pipeline, cable and conduits for entities in the petroleum, petrochemical and water industries;

·Providing installation and maintenance of industrial facilities for entities in the petroleum, petrochemical and water industries;

·Providing installation of complex commercial and industrial cast-in-place structures; and

·Providing construction of highways, industrial and environmental construction.

East Construction Services

The East Construction Services segment includes the JCG construction business, located primarily in the southeastern United States and the businesses located in the Gulf Coast region of the United States, including Cardinal Contractors, Inc.  The segment also includes the operating results relating to the acquisition of Sprint Pipeline Services on March 12, 2012, Silva on May 30, 2012 and Saxon on September 28, 2012.

F-28

West Construction Services

The West Construction Services segment includes the construction services performed by ARB, ARB Structures, Inc., Rockford, Alaska Continental Pipeline, Inc., All Day Electric Company, Inc., Primoris Renewables, Inc. Juniper Rock, Inc. and Stellaris, LLC.  Most of the entities perform work primarily in California.  Rockford operates throughout the United States.  The Segment also includes the operating results relating to the acquisition of Q3C on November 17, 2012, with operations in the upper Midwest United States.  The Blythe Power Constructors joint venture is also included as part of the segment.

Engineering

The Engineering segment includes the results of OnQuest, Inc. and Born Heaters Canada, ULC.  The Engineering group specializes in designing, supplying, and installing high-performance furnaces, heaters, burner management systems, and related combustion and process technologies for clients in the oil refining, petrochemical, and power generation industries. It furnishes turnkey project management with technical expertise and the ability to deliver custom engineering solutions worldwide.

All intersegment revenues and gross profit, which were immaterial, have been eliminated in the following tables.

Segment Revenues

Revenue by segment for the years ended December 31, 2012, 2011 and 2010 was as follows:

	Year Ended December 31,
	2012				2011				2010
Business Segment	Revenue		% of Segment Revenue		Revenue		% of Segment Revenue		Revenue		% of Segment Revenue
East Construction Services	$	662,248	43.0	%	$	528,745	36.2	%	$	480,533	51.0	%
West Construction Services	832,860		54.0	%	881,733		60.4	%	402,273		42.7	%
Engineering	46,626		3.0	%	49,672		3.4	%	58,959		6.3	%
Total	$	1,541,734	100.0	%	$	1,460,150	100.0	%	$	941,765	100.0	%

Segment Gross Profit

Gross profit by segment for the years ended December 31, 2012, 2011 and 2010 was as follows:

	Year Ended December 31,
	2012				2011				2010
Business Segment	Gross Profit		% of Segment Revenue		Gross Profit		% of Segment Revenue		Gross Profit		% of Segment Revenue
East Construction Services	$	63,811	9.6	%	$	57,118	10.8	%	$	48,770	10.1	%
West Construction Services	119,328		14.3	%	118,385		13.4	%	61,897		15.4	%
Engineering	9,571		20.5	%	9,700		19.5	%	12,122		20.6	%
Total	$	192,710	12.5	%	$	185,203	12.7	%	$	122,789	13.0	%

Segment Goodwill

The amount of goodwill recorded by segment at December 31, 2012 and 2011 was as follows:

Segment	2012		2011
East Construction Services	$	69,859	$	59,659
West Construction Services	44,641		32,079
Engineering	2,441		2,441
Total	$	116,941	$	94,179

F-29

Geographic Region — Revenues and Total Assets

Revenue and total asset by geographic area for the years ended December 31, 2012, 2011 and 2010 was as follows:

	External Revenues												Total Assets
	Year Ended December 31,												At December 31,
	2012				2011				2010				2012		2011
Country	Revenue		% of Revenue		Revenue		% of Revenue		Revenue		% of Revenue
United States	$	1,530,819	99.3	%	$	1,447,863	99.2	%	$	920,051	97.7	%	$	920,872	$	719,028
Non-United States	10,915		0.7	%	12,287		0.8	%	21,714		2.3	%	10,335		9,385
Total	$	1,541,734	100.0	%	$	1,460,150	100.0	%	$	941,765	100.0	%	$	931,207	$	728,413

All non-United States revenue was generated in the Engineering Segment.  For the table above, revenues generated by OnQuest’s Canadian subsidiary, Born Heaters Canada, ULC, were used to estimate non-United States revenues.

Note 16—Customer Concentrations

The Company operates in multiple industry segments encompassing the construction of commercial, industrial, and public works infrastructure assets throughout primarily the United States.

During the years ended December 31, 2012, 2011 and 2010, the Company generated 44.8%, 46.5% and 41.2%, of its revenues, respectively, from the following customers:

Description of Customer’s	2012				2011				2010
Business	Amount		Percentage		Amount		Percentage		Amount		Percentage
Texas DOT	$	88,783	5.8	%	$	*	*		$	*	*
Public gas and electric utility	224,845		14.6	%	165,373		11.3	%	69,212		7.3	%
Gas utility	86,786		5.6	%	*		*		*		*
Private gas and electric utility	106,804		6.9	%	*		*		*		*
Louisiana DOT	170,899		11.1	%	239,516		16.4	%	193,139		20.5	%
Public state agency	*		*		*		*		47,465		5.0	%
Gas utility (Ruby Pipeline Project)	12,553		0.8	%	274,898		18.8	%	79,224		8.4	%
	$	690,670	44.8	%	$	679,787	46.5	%	$	389,040	41.2	%

(*)Indicates a customer with less than 5% of revenues during such period.

For the year ended December 31, 2012, 2011 and 2010, approximately 55.9%, 68.5% and 55.3%, respectively, of total revenues were generated from the top ten customers of the Company in that year.  In each of the years, a different group of customers comprised the top ten customers by revenue.

At December 31, 2012, approximately 10.0% of the Company’s accounts receivable were due from one customer, and that customer provided 14.6% of the Company’s revenues for the year ended December 31, 2012.   At December 31, 2011, approximately 15.5% of the Company’s accounts receivable were due from the same customer, which provided 11.3% of the Company’s revenues for the year ended December 31, 2011.

Note 17 — Multiemployer Plans

Union Plans—The Company contributes to multiemployer benefit plans for its union employees at rates determined by the various collective bargaining agreements.  Each plan’s trustees determine the eligibility and allocations of contributions and benefit amounts, determine the types of benefits, and administer the plan.

The Company contributed $30,103, $24,182 and $12,590, to multiemployer pension plans for the years ended December 31, 2012, 2011 and 2010, respectively. These costs were charged to the related construction contracts in process.  As a result of the November 2010 acquisition of Rockford, contributions during 2011 increased substantially, especially from the large workload associated with the Ruby contract.

F-30

For the Company, the financial risks of participating in multiemployer plans are different from single-employer plans in the following respects:

·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 the plan, the unfunded obligations of the plan may be borne by the remaining participating employers.

·If a participating employer chooses to stop participating in the plan, a withdrawal liability may be created based on the unfunded vested benefits for all employees in the plan.

Under U.S. legislation regarding multiemployer pension plans, a company is required to pay an amount that represents its proportionate share of a plan’s unfunded vested benefits in the event of withdrawal from a plan or upon plan termination.

The Company participates in a number of multiemployer pension plans, and its potential withdrawal obligation may be significant.  Any withdrawal liability would be recorded when it is probable that a liability exists and can be reasonably estimated, in accordance with GAAP.  Other than as discussed in the following paragraph, the Company has no plans to withdraw from any of these agreements.

In November 2011, Rockford, ARB and Q3C, along with other members of the Pipe Line Contractors Association (“PLCA”), withdrew from the Central States Southeast and Southwest Areas Pension Fund multiemployer pension plan (the “Plan”).  In connection with the withdrawal, the Company recorded an estimated net liability and SG&A expense of $5,000 in 2011 based on information provided by the Plan.   In 2012, the Company increased the estimated withdrawal liability balance to $7,500, recording an SG&A expense of $2,500.  The Company withdrew from the Plan in order to mitigate its liability in connection with the Plan, which is significantly underfunded.  The Plan has asserted that the PLCA members did not affect a withdrawal in 2011, although the Company believes that a legally effective withdrawal occurred in November 2011 and has recorded the withdrawal liability on that basis.  If the Plan were to prevail in its assertion and the withdrawal of the Company were deemed to occur after 2011, the amount of any withdrawal liability would be expected to increase.

Employers are required to provide additional quantitative and qualitative disclosures for multiemployer plans under ASU 2011-09 issued by the FASB in September 2011.  During the last three years, the Company made annual contributions to 66 pension plans.   The Company was not listed in any of its plans’ Form 5500s as providing more than 5% of the plan’s total contributions.  Our participation in significant plans for the year ended December 31, 2012 and 2011 is outlined in the table below.  The “EIN/Pension Plan Number” column provides the Employer Identification Number (“EIN”) and the three digit plan number.  The zone status is based on the latest information that we received from the plan and is certified by the plan’s actuary.  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.  The “FIP/RP Status Pending/Implemented” column indicates plans for which a financial improvement plan (“FIP”) or a rehabilitation plan (“RP”) is either pending or has been implemented.  The “Surcharge Imposed” column includes plans in a red zone status that require a payment of a surcharge in excess or regular contributions.  The last column lists the expiration date of the collective bargaining agreement to which the plan is subject. The table follows:

F-31

	EIN/Pension Plan	Pension Protection Act Zone Status		FIP/RP Status	Surcharge	Collective Bargaining Agreement	Contributions of the Company
Pension Fund Name	Number	2012	2011	Pending/Implemented	Imposed	Expiration Date	2012		2011		2010
So Cal Pipetrades Trust Funds	51-6108443/001	Green as of January 1, 2011	Green as of January 1, 2010	No	No	6/30/2014	5,298		2,931		1,394
Laborers Pension Trust Fund for Northern California	94-6277608/001	Yellow as of June 1, 2012	Yellow as of June 1, 2011	Yes	No	6/30/2015	$	4,816	$	3,501	$	1,237
Construction Laborers Pension Trust for Southern California	43-6159056/001	Green as of January 1, 2011	Green as of January 1, 2010	No	No	6/30/2015	2,952		2,373		1,694
Central Pension Fund of the International Union of Operating Engineers and Participating Employers	36-6052390/001	Green as of February 1, 2011	Green as of February 1, 2010	No	No	5/31/2014	2,206		1,797		946
Laborers International Union of North America National (Industrial) Pension Fund	52-6074345/001	Red as of March 31, 2011	Red as of March 31, 2011	Yes	Yes (1)	5/31/2014	1,995		1,740		826
Pipeline Industry Benefit Fund	73-6146433/001	Green as of January 1, 2011	Green as of January 1, 2010	No	No	5/31/2014	1,747		1,793		1,110
Boilermaker-Blacksmith National Pension Trust	48-6168020/001	Yellow as of January 1, 2011	Yellow as of January 1, 2010	Yes	No	9/30/2014	1,502		1,035		469
Northern California Pipe Trades Pension Plan	94-3190386/002	Green as of January 1, 2011	Green as of January 1, 2010	No	No	4/30/2014	1,638		1,741		283
				Contributions for significant plans			$	22,154	$	16,911	$	7,959
				Contributions to other multiemployer plans			7,949		7,271		4,631
				Total contributions made			$	30,103	$	24,182	$	12,590

(1)Temporary surcharge of 5% of total contributions imposed during the period June 1, 2010 through December 31, 2010. Effective January 1, 2011, the surcharge was increased to 10% of total contributions. Under the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010, the plan adopted to amortize the fund’s 2008 investment losses over a 29 year period (rather than 15 years) and the 2008 investment losses will be recognized for funding purposes over a 10 year smoothing period (rather than 5 years). During this period, benefits cannot be increased.

F-32

Note 18—Company Retirement Plans

401(k) Plan—The Company provides a 401(k) plan for its employees not covered by collective bargaining agreements. Under the plan, employees are allowed to contribute up to 100% of their compensation, within the Internal Revenue Service (“IRS”) prescribed annual limit.  The Company makes employer match contributions of 100% of the first 3% and 50% of the next 2% of employee contributions. The Company may, at the discretion of its Board of Directors, make an additional profit share contribution to the 401(k) plan.  The Company’s contribution to the plan for the years ended December 31, 2012, 2011 and 2010 were $2,267, $1,963 and $1,734, respectively.

Effective January 1, 2011, the members of the JCG 401(k) plan became eligible for entry into the Company plan and the JCG plan was terminated.  Effective October 1, 2011, the members of the Rockford 401(k) plan became eligible for entry into the Company plan and the Rockford plan was terminated.  The members of the Q3C 401(k) plan will become eligible for entry into the Company plan in 2013 and the Q3C plan will be terminated.  The employees of Sprint, Silva and Saxon had no 401(k) plans prior to the acquisitions and became eligible for the Company plan in 2012.

Born Heaters Canada, ULC RRSP-DPSP Plan—The Company provides a RRSP-DPSP plan (Registered Retirement Saving Plan—Deferred Profit Sharing Plan) for its employees of Born Heaters Canada, ULC, not covered by collective bargaining agreements. There are two components to the plan. The RRSP portion will be contributed by the employee, whereas the Company portion is paid in the DPSP. Under this plan, the company makes employer match contributions of 100% of the first 3% and 50% of the next 2% of employee contributions. Vesting in the DPSP portion is one year of employment. The Company’s contribution to the DPSP during the years ended December 31, 2012, 2011 and 2010 was $69, $78 and $86, respectively.

The Company has no other post-retirement benefits.

Note 19—Deferred Compensation Agreements

Primoris Long-Term Retention Plan—The Company adopted a long-term incentive plan for certain senior managers and executives.  The voluntary plan provides for the deferral of one half of the participant’s annual earned bonus for one year.  Except in the case of death, disability or involuntary separation from service, the deferred compensation is vested to the participant only if actively employed by the Company on the payment date of bonus amounts the following year.  The amount of compensation deferred under this plan is calculated each year.  Total deferred compensation liability under this plan as of December 31, 2012 and 2011 was $4,298 and $4,281, respectively.

Participants in the long term incentive plan may elect to purchase Company common stock at a discounted amount.  For bonuses earned in 2012 and 2011, the participants could purchase up to one sixth of their bonus amount, calculated as 75% of the average market closing prices in December 2012 and 2011, respectively.

JCG Stakeholder Incentive Plan — In December 2012 and 2011, JCG maintained a deferred compensation plan for senior management employees.  The plan provided for annual vesting over a five-year period.  Once vested and upon a triggering event, such as termination, death or disability, the deferred benefit amount plus interest is paid in equal monthly installments over three years.  The amount of compensation deferred under the plan is calculated each year.  Total deferred compensation liability under this plan at December 31, 2012 and 2011 was $1,615 and $1,600, respectively.

Note 20—Related Party Transactions

Primoris has entered into various leasing transactions with Stockdale Investment Group, Inc. (“SIGI”).  Brian Pratt, our Chief Executive Officer, President and Chairman of the Board of Directors and our largest stockholder, holds a majority interest and is the chairman, president and chief executive officer and a director of SIGI.  John M. Perisich, our Senior Vice President and General Counsel, is secretary of SIGI.

Primoris leases properties located in Bakersfield (lease expires in October 31, 2015), Pittsburg (lease expires September 30, 2014) and San Dimas in California (lease expires March 30, 2019), and in Pasadena, Texas (leases expire in July 2019 and 2021) from SIGI.  During the years ended December 31, 2012, 2011 and 2010, the Company paid $929, $910 and $892, respectively, in lease payments to SIGI for the use of these properties.

The Company entered into a $6,100 agreement in 2010 to construct a wastewater facility for Pluris, LLC, a private company in which Brian Pratt also holds a majority interest. The transaction was reviewed and approved by the Audit Committee of the Board of Directors of the Company.  The project was substantially completed in December 2011 and the Company recognized revenues of $362 and $5,680 in 2012 and 2011, respectively at normal margins.

F-33

Primoris leases a property from Roger Newnham, one of our stockholders and a manager of our subsidiary Born Heaters Canada. The property is located in Calgary, Canada. During the years ended December 31, 2012, 2011 and 2010 Primoris paid $292, $277 and $252, respectively, in lease payments to Mr. Newnham for the use of this property. The term of the lease is through December 31, 2014.

Primoris leases a property from Lemmie Rockford, one of our stockholders, which commenced November 1, 2011.  The property is located in Toledo, Washington.  During the year ended December 31, 2012 and 2011, Primoris paid $90 and $90, respectively, in lease payments to Mr. Rockford for the use of this property.  The lease expires on January 15, 2015.

As a result of the November 2012 acquisition of Q3C, the Company became party to leased property from Quality RE Partners, owned by three of the Q3C selling shareholders, of whom two are current employees, including Jay Osborn, President of Q3C.  The lease commenced October 28, 2012.  The property is located in Little Canada, Minnesota.  During the year ended December 31, 2012, the Company paid $31, in lease payments to Quality RE Partners for the use of this property.  The lease expires on October 27, 2022.

The Company owns several non-consolidated investments and has recognized revenues on work performed for those joint ventures.  The Company recognized $0, $0 and $83 in related party revenues during the years ended December 31, 2012, 2011 and 2010, respectively, on the OMPP joint venture.  The Company also recognized $0, $0 and $472 in related party revenues for the years ended December 31, 2012, 2011 and 2010, respectively, from the St. - Bernard Levee Partners joint venture.  On November 17, 2012, the Company acquired a 49% interest in Alvah, Inc. as part of the Q3C acquisition.  During 2012, payments made to Alvah as a subcontractor by ARB and Q3C amounted to $6,377 and $537, respectively.  See Note 8— “Equity Method Investments”.

Note 21—Income Taxes

The components of the provision for income taxes are as follows:

	2012			2011			2010
Current provision (benefit)
Federal	$	27,524		$	24,791		$	18,491
State	7,125			5,697			4,663
Foreign	67			621			1,081
	$	34,716		$	31,109		$	24,235
Deferred provision (benefit)
Federal	(451		)	6,488			(1,951		)
State	(366		)	849			(189		)
Foreign	(62		)	(122		)	(36		)
	(879		)	7,215			(2,176		)
Change in valuation allowance	—			(150		)	—
Total	$	33,837		$	38,174		$	22,059

A reconciliation of income tax expense compared to the amount of income tax expense that would result by applying the U.S. federal statutory income tax rate to pre-tax income is as follows:

	2012		2011		2010
U.S. federal statutory income tax rate	35.00	%	35.00	%	35.00	%
State taxes, net of federal income tax impact	4.87	%	4.33	%	4.52	%
Foreign tax credit	(0.01	)%	(0.52	)%	(1.88	)%
Canadian income tax	0.01	%	0.52	%	1.88	%
Domestic production activities deduction	(2.97	)%	(2.79	)%	(3.30	)%
Other items	0.45	%	2.92	%	3.40	%
Effective tax rate on income before provision for income taxes excluding income attributable to noncontrolling interests	37.35	%	39.46	%	39.62	%
Impact of income from noncontrolling interests on effective tax rate	(0.61	)%	—		—
Effective tax rate on income before provision for income taxes and noncontrolling interests	36.74	%	39.46	%	39.62	%

F-34

Deferred income taxes are recognized for temporary differences between the financial reporting basis of the assets and liabilities and their respective tax basis and operating losses, capital losses and tax credit carry-forwards based on enacted tax rates expected to be in effect when such amounts are realized or settled. However, deferred tax assets are recognized only to the extent that it is more likely than not that they will be realized based on consideration of available evidence, including future reversals of existing taxable temporary differences, future projected taxable income and tax planning strategies.

During 2009, the Company recognized a capital loss related to the sale of its equity interest in ARB Avenal. A valuation allowance of $344 has been provided against the Company’s deferred tax for its capital loss carryforward as the Company believes that it is more likely than not that this capital loss will not be realized. The Company’s determination that it will not fully realize this deferred tax asset is based upon the Company’s future unlikelihood of generating sufficient capital gains. No valuation allowance has been provided to the Company’s remaining deferred tax assets as the Company believes it is more likely than not that these deferred tax assets will be realized.

The tax effect of temporary differences that give rise to deferred income taxes for the year ended December 31, 2012 and 2011 are as follows:

	2012			2011
Deferred tax assets:
Accrued workers compensation	$	4,973		$	4,023
Insurance reserves	1,114			2,657
Other accrued liabilities	10,434			6,604
State income taxes	1,537			1,605
Capital loss carryforward	344			344
Foreign tax credit	662			644
Valuation allowance	(344		)	(344		)
Total deferred tax assets	18,720			15,533
Deferred tax liabilities
Depreciation and amortization	(26,661		)	(24,659		)
Prepaid expenses and other	(1,600		)	(1,294		)
Total deferred tax liabilities	(28,261		)	(25,953		)
Total	$	(9,541	)	$	(10,420	)

The Company recognizes accrued interest and penalties related to uncertain tax positions, if any, as a component of income tax expense.

At December 31, 2012 and 2011, there were no material unrecognized tax benefits and the Company does not anticipate that there will be a material change in the balance of the unrecognized tax benefits within the next 12 months.

In the third quarter of 2012, the Internal Revenue Service (“IRS”) concluded an examination of our federal income tax returns for 2008 and 2009.  The conclusion of these examinations did not have a material impact on the financial statements.  The tax years 2010 through 2011 remain open to examination by the IRS.  The statute of limitations of state and foreign jurisdictions vary generally between 3 to 5 years.  Accordingly, the tax years 2007 through 2011 generally remain open to examination by the other major taxing jurisdictions in which the Company operates.

Note 22—Earnings Per Share

The computation of basic and diluted earnings per share for the years ended December 31, 2012, 2011 and 2010 follows:

	2012			2011		2010
Numerator:
Net income	$	58,267		$	58,559	$	33,616
Net income attributable to noncontrolling interests	(1,511		)	—		—
Net income attributable to Primoris	$	56,756		$	58,559	$	33,616
Denominator (shares in thousands):
Weighted average shares for computation of basic earnings per share	51,391			50,707		42,694
Dilutive effect of warrants and units (1)	—			51		908
Dilutive effect of contingently issuable shares (2)	—			386		989
Dilutive effect of shares issued to independent directors	11			9		—
Dilutive effect of JCG convertible preferred shares (3)	—			—		2,287
Dilutive effect of shares to be issued to Q3C sellers (4)	4			—		—
Weighted average shares for computation of diluted earnings per share	51,406			51,153		46,878
Earnings per share:
Basic	$	1.10		$	1.15	$	0.79
Diluted	$	1.10		$	1.14	$	0.72

(1)Represents the dilutive effect of common stock warrants available under the Unit Purchase Option (“UPO”).  See Note 23 — “Stockholders’ Equity”.

F-35

(2)Represents the dilutive effect of the following contingency arrangements which were met at the end of each year, but for which shares of common stock were not issued until the following year:

a)On March 25, 2010, a total of 2,499,975 shares were issued in accordance with the 2009 merger agreement between Rhapsody and Former Primoris.

b)The effect of 74,906 unregistered shares of common stock issued in March 2010 as a result of Cravens Services, Inc. (a small acquisition made in 2009) meeting a defined performance target in 2009.

c)A total of 1,095,646 unregistered shares of common stock issued to JCG’s sellers in March 2011 as a result of JCG meeting a defined performance target in 2010.

d)A total of 494,095 unregistered shares of common stock issued to Rockford’s former stockholders in March 2011 as a result of Rockford meeting a defined performance target in 2010 and an additional 232,637 unregistered shares of common stock issued in March 2012 as a result of Rockford meeting a defined performance target in 2011.

(3)Represents the dilutive effect of the conversion of preferred stock into 8,185,278 shares of common stock.  The conversion was approved at a special meeting of the stockholders held on April 12, 2010.

(4)Represents the dilutive effect of the 29,273 unregistered shares of common stock to be issued as part of the purchase consideration for the Q3C acquisition.  The shares were issued in February 2013.

Note 23—Stockholders’ Equity

Common Stock

The Company is authorized to issue 90,000,000 shares of $0.0001 par value common stock, of which 51,403,686 and 51,059,132 shares were issued and outstanding as of December 31, 2012 and 2011, respectively. As of December 31, 2012, there were 302 holders of record of our common stock.

In March 2012 and March 2011, the Company received $1,240 and $647 in exchange for 111,790 and 94,966 shares of common stock, respectively, under a purchase arrangement within the Company’s Long-Term Incentive Plan for managers and executives.

At December 31, 2012, there were 1,270,744 shares of common stock reserved for issuance upon exercise of all future stock option grants, SARS and grants of restricted shares under the 2008 Equity Plan. At December 31, 2012, there were no stock options, SARS or restricted shares of stock issued or outstanding.

As part of the quarterly compensation of the non-employee members of the Board of Directors, the Company issued shares of common stock as follows:  15,280 shares in August 2012, 12,395 shares in February 2012 and 14,825 shares in August 2011.

As part of the acquisition of Sprint, the Company issued 62,052 unregistered shares of common stock in March 2012.  Additionally, as part of the acquisition of Q3C, the Company agreed to issue shares of common stock amounting to $430 based on the average December 2012 closing price, or $14.69 per share.  The Company issued 29,273 unregistered shares of stock in February 2013.

F-36

In May 2012, the Company’s Board of Directors authorized a share repurchase program under which the Company could, from time to time and depending on market conditions, share price and other factors, acquire shares of its common stock on the open market or in privately negotiated transactions up to an aggregate purchase price of $20 million.  During the period from May 2012 through June 2012, the Company purchased and cancelled 89,600 shares of stock for $1.0 million at an average cost of $11.17 per share.  The share repurchase program expired on December 31, 2012.

Contingent shares of common stock

Former Primoris Contingent Shares

The Company achieved a specified financial milestone for 2009 per the merger agreement between Rhapsody and Former Primoris.  In March 2010 a total of 2,499,975 shares of common stock were issued.

JCG Contingent Shares

A total of 1,095,646 shares of common stock were issued to JCG’s sellers in March 2011 as a result of JCG meeting its defined performance target per the merger agreement between JCG and the Company.

Cravens Contingent Shares

A total of 74,906 shares of common stock were issued in March 2010 as a result of Cravens Services, Inc. (a small 2009 acquisition) meeting a defined performance target per the merger agreement between Cravens and the Company.

Rockford Contingent Shares

A total of 494,095 shares of common stock were issued to Rockford’s sellers in March 2011 as a result of Rockford meeting a defined performance target in 2010.  An additional 232,637 shares of common stock were issued in March 2012 as a result of Rockford meeting a defined performance target in 2011.

Preferred Stock

The Company is authorized to issue 1,000,000 shares of $0.0001 par value preferred stock.  As part of the consideration for the acquisition of JCG, the Company issued 81,852.78 shares of Preferred Stock.  On April 12, 2010, at a special meeting, the Company’s stockholders approved the conversion of the 81,852.78 shares of Preferred Stock into 8,185,278 shares of common stock.  No shares of Preferred Stock were outstanding at December 31, 2012.

Note 24—Warrants and Purchase Options For Purchase of Stock

Warrants

As of December 31, 2012, there were no warrants outstanding.

At the time of the initial public offering for Rhapsody, warrants were issued to purchasers of the common stock.  Each warrant entitled the holder to purchase one share of common stock at a price of $5.00 per share and was exercisable at any time on or prior to October 2, 2010 (“Warrant”), unless earlier redeemed by the Company.  As of December 31, 2009, a total of 4,617,499 Warrants were outstanding.  From January 1, 2010 through October 1, 2010, a total of 4,337,909 Warrants were exercised resulting in cash proceeds of $21,690.

On September 7, 2010, the Company adopted a Rule 10b5-1 trading plan with a broker to facilitate the repurchase of Warrants.  From September 7, 2010 through the plan termination date of September 28, 2010, the broker completed the repurchase of 245,846 Warrants in accordance with the plan, for $277.

The remaining 33,744 Warrants expired on October 2, 2010.

Unit Purchase Options

At the time of the Rhapsody initial public offering in October 2006, the underwriter, Early Bird Capital, purchased a total of 450,000 Unit Purchase Options (“UPO”).  Each UPO provided the holder the right to purchase one share of common stock and one warrant.  The UPO expired on October 2, 2011, and the terms of the UPO allowed for a cashless conversion of one share of common stock for $8.80 per share. On June 29, 2011, the underwriter exercised all of their 450,000 UPO on a cashless basis. Using the previous day’s closing price of $13.31 per share, the exercise would have resulted in the issuance of 152,480 shares of common stock. In lieu of issuing these shares, the parties negotiated a cash payment of approximately $2.0 million, which was made on June 30, 2011 and recorded as a reduction of additional paid-in capital on the balance sheet.

F-37

Note 25—Selected Quarterly Financial Information (Unaudited)

Selected unaudited quarterly consolidated financial information is presented in the following tables:

	Year Ended December 31, 2012
(In thousands, except per share data)	1st Quarter		2nd Quarter		3rd Quarter		4th Quarter
Revenues	$	291,573	$	337,436	$	431,842	$	480,883
Gross profit	37,596		44,004		56,291		54,819
Net income	10,530		11,857		17,948		17,932
Net income attributable to Primoris	10,486		11,733		17,516		17,021
Earnings per share:
Basic earnings per share	$	0.21	$	0.23	$	0.34	$	0.33
Diluted earnings per share	$	0.20	$	0.23	$	0.34	$	0.33
Weighted average shares outstanding
Basic	51,096		51,435		51,398		51,404
Diluted	51,337		51,435		51,404		51,418

	Year Ended December 31, 2011
(In thousands, except per share data)	1st Quarter		2nd Quarter		3rd Quarter		4th Quarter
Revenues	$	359,645	$	351,956	$	375,483	$	373,066
Gross profit	40,630		41,406		52,121		51,046
Net income	12,278		14,462		19,348		12,471
Earnings per share:
Basic earnings per share	$	0.25	$	0.28	$	0.38	$	0.24
Diluted earnings per share	$	0.24	$	0.28	$	0.38	$	0.24
Weighted average shares outstanding
Basic	49,675		51,044		51,054		51,059
Diluted	51,051		51,154		51,054		51,292

F-38

EXHIBIT INDEX

Exhibit No.	Description
Exhibit 2.1	Agreement and Plan of Merger, dated February 19, 2008, by and among Rhapsody Acquisition Corp., Primoris Corporation and certain stockholders of Primoris Corporation (1)
Exhibit 2.2	First Amendment to Agreement and Plan of Merger, dated May 15, 2008, by and among Rhapsody Acquisition Corp., Primoris Corporation and certain stockholders of Primoris Corporation (2)
Exhibit 2.3	Membership Interest Purchase Agreement, dated November 18, 2009, by and among Primoris Services Corporation, James Construction Group, LLC, each of the limited liability company members of James Construction Group, LLC and the representative of the limited liability company members of James Construction Group, LLC (3)
Exhibit 2.4	First Amendment to the Membership Interest Purchase Agreement, dated December 18, 2009, by and among Primoris Services Corporation, James Construction Group, LLC, each of the limited liability company members of James Construction Group, LLC and the representative of the limited liability company members of James Construction Group, LLC (4)
Exhibit 2.5	Second Amendment to Membership Interest Purchase Agreement, dated January 14, 2010, by and among Primoris Services Corporation, James Construction Group, LLC and the representative of the limited liability company members of James Construction Group, LLC (5)
Exhibit 2.6	Membership Interest Purchase Agreement, dated July 1, 2010, by and between Primoris Services Corporation, Kealine Holdings LLC and WesPac Energy LLC (6)
Exhibit 2.7	Agreement and Plan of Merger, dated November 8, 2010, by and among Primoris Services Corporation, a Delaware corporation, Primoris Merger Sub, Inc., a Delaware corporation and a wholly-owned subsidiary of Primoris Services Corporation, Rockford Holdings Corporation, a privately-held Delaware corporation, all of the stockholders of Rockford Holdings Corporation and Christopher S. Wallace as representative of the stockholders of Rockford Holdings Corporation (7)
Exhibit 2.8	Stock Purchase Agreement, dated November 8, 2012, by and among Primoris Services Corporation, a Delaware corporation, Q3 Contracting Inc., a privately-held Minnesota corporation, all of the shareholders of Q3 Contracting Inc. and Jay P. Osborn as representative of the shareholders of Q3 Contracting Inc. (8)
Exhibit 3.1	Fourth Amended and Restated Certificate of Incorporation of Primoris Services Corporation, dated May 21, 2009 (9)
Exhibit 3.2	Amended and Restated Bylaws of Primoris Services Corporation (10)
Exhibit 3.3	Certificate of Designations, Powers, Preferences and Rights of the Series A Non-Voting Contingent Convertible Preferred Stock of Primoris Services Corporation, dated December 14, 2009 (11)
Exhibit 4.1	Specimen Common Stock Certificate (12)

Exhibit 10.1	Employment Agreement, dated February 19, 2008, by and among Primoris Services Corporation and Brian Pratt (#) (10)
Exhibit 10.2	Employment Agreement, dated February 18, 2008, by and among Primoris Services Corporation and John P. Schauerman (#)(10)
Exhibit 10.3	Employment Agreement, dated February 18, 2008, by and among Primoris Services Corporation and John M. Perisich (#)(10)
Exhibit 10.4	Employment Agreement, dated February 18, 2008, by and among Primoris Services Corporation and Alfons Theeuwes (#)(10)
Exhibit 10.5	Employment Agreement, dated February 6, 2009, by and among Primoris Services Corporation and Peter J. Moerbeek (#)(10)
Exhibit 10.6	Employment Agreement, dated November 18, 2009, by and among James Construction Group, LLC and Michael D. Killgore (#)(4)
Exhibit 10.7	2008 Long-Term Equity Incentive Plan (#)(13)
Exhibit 10.8	General Agreement of Indemnity, dated in 2004, by and among Primoris Corporation, ARB, Inc., ARB Structures, Inc., Cardinal Contractors, Onquest, Inc. and Liberty Mutual Insurance Company (10)
Exhibit 10.9	Loan and Security Agreement, dated October 28, 2009, by and between Primoris Services Corporation and The PrivateBank and Trust Company (14)
Exhibit 10.10	First Amendment to Loan and Security Agreement, dated January 14, 2010, by and among Primoris Services Corporation and The PrivateBank and Trust Company (15)
Exhibit 10.11	Second Amendment to Loan and Security Agreement, dated September 30, 2010, by and among Primoris Services Corporation and The PrivateBank and Trust Company (15)
Exhibit 10.12	Escrow Agreement, dated December 15, 2009, by and among Primoris Services Corporation, the representative of the limited liability company members of James Construction Group, LLC and Continental Stock Transfer & Trust Company, as escrow agent (4)
Exhibit 10.13	Promissory Note, dated December 18, 2009, executed by Primoris Services Corporation in favor of the limited liability company members of James Construction Group, LLC (4)
Exhibit 10.14	Subordination Agreement, dated December 18, 2009, by and among The PrivateBank and Trust Company and the limited liability company members of James Construction Group, LLC (4)
Exhibit 10.15	Subordination Agreement, dated December 18, 2009, by and among Liberty Mutual Insurance Company and the limited liability company members of James Construction Group, LLC (4)
Exhibit 10.16	Subordination Agreement, dated December 18, 2009, by and among CNA Surety Corporation and the limited liability company members of James Construction Group, LLC (4)

Exhibit 10.17	Promissory Note, dated December 18, 2009, executed by James Construction Group, LLC in favor of the limited liability company members of James Construction Group, LLC (4)
Exhibit 10.18	Noncompetition Agreement, dated December 18, 2009, by and among Primoris Services Corporation and Michael D. Killgore (4)
Exhibit 10.19	Master Loan and Security Agreement, dated June 25, 2010, by and between Stellaris, LLC and Banc of America Leasing & Capital, LLC (16)
Exhibit 10.20	Addendum to Master Loan and Security Agreement, dated June 25, 2010, by and between Stellaris, LLC, James Construction Group, LLC and Banc of America Leasing & Capital, LLC (16)
Exhibit 10.21	Equipment Security Note, dated June 25, 2010, by and between Stellaris, LLC, James Construction Group, LLC and Banc of America Leasing & Capital, LLC (16)
Exhibit 10.22	Master Loan and Security Agreement, dated August 31, 2009, by and between Stellaris, LLC and Fifth Third Bank (16)
Exhibit 10.23	Amendment No. 001 to Master Loan and Security Agreement, dated June 16, 2010, by and between Stellaris, LLC, James Construction Group, LLC and Fifth Third Bank (16)
Exhibit 10.24	Amendment No. 002 to Master Loan and Security Agreement, dated June 29, 2010, by and between Stellaris, LLC, James Construction Group, LLC and Fifth Third Bank (16)
Exhibit 10.25	Promissory Note, dated June 16, 2010, by and between Stellaris, LLC, James Construction Group, LLC and Fifth Third Bank (16)
Exhibit 10.26	Purchase Trading Plan Agreement, dated September 7, 2010, by and between Primoris Services Corporation and CJS Securities, Inc. (17)
Exhibit 10.27	Convertible Promissory Note, dated November 12, 2010, executed by Primoris Services Corporation in favor of certain of the stockholders of Rockford Holdings Corporation (18)
Exhibit 10.28	Form of Employment Agreement, dated November 5, 2010, by and among Rockford Corporation and Employee (18)
Exhibit 10.29	Form of Noncompetition Agreement, dated November 5, 2010, by and among Primoris Services Corporation and Employee (18)
Exhibit 10.30	Subordination Agreement, dated November 12, 2010, by and among Primoris Services Corporation, Christopher S. Wallace, as representative of the stockholders of Rockford Holdings Corporation, and Liberty Mutual Insurance Company (18)
Exhibit 10.31	Subordination Agreement, dated November 12, 2010, by and among Primoris Services Corporation, Christopher S. Wallace, as representative of the stockholders of Rockford Holdings Corporation, and The PrivateBank and Trust Company (18)
Exhibit 10.32	Subordination Agreement, dated November 12, 2010, by and among Primoris Services Corporation, Christopher S. Wallace, as representative of the stockholders of Rockford Holdings Corporation, and Michael D. Killgore, as representative of the former members of James Construction Group, LLC (18)

Exhibit 10.33	Subordination Agreement, dated November 12, 2010, by and among Primoris Services Corporation, Christopher S. Wallace, as representative of the stockholders of Rockford Holdings Corporation, and CNA Surety Corporation (18)
Exhibit 10.34	Loan Agreement, dated December 29, 2010, by and between Stellaris, LLC and RBS Asset Finance, Inc. (19)
Exhibit 10.35	Note, dated December 29, 2010, by and between Stellaris, LLC and RBS Asset Finance, Inc. (19)
Exhibit 10.36	Collateral Schedule No. 1, dated December 29, 2010, by and between Stellaris, LLC and RBS Asset Finance, Inc. (19)
Exhibit 10.37	Guaranty, dated December 29, 2010, by and between Primoris Services Corporation and RBS Asset Finance, Inc. (19)
Exhibit 10.38	Third Amendment to Loan and Security Agreement, dated March 3, 2011, by and among Primoris Services Corporation and The PrivateBank and Trust Company (20)
Exhibit 10.39	Fourth Amendment to Loan and Security Agreement, dated October 20, 2011, by and among Primoris Services Corporation and The PrivateBank and Trust Company (21)
Exhibit 10.40	Credit Agreement, dated September 23, 2011, by and among Primoris Services Corporation and Bank of the West (22)
Exhibit 10.41	Fifth Amendment to Loan and Security Agreement, dated November 28, 2011, by and among Primoris Services Corporation and The PrivateBank and Trust Company (22)
Exhibit 10.42	Loan and Security Agreement, dated November 30, 2011, by and among Stellaris LLC, James Construction Group LLC and JPMorgan Chase Bank, N.A. (22)
Exhibit 10.43	Business Purpose Promissory Note, dated November 30, 2011, by and among Stellaris LLC, James Construction Group LLC and JPMorgan Chase Bank, N.A. (22)
Exhibit 10.44	Schedule A-1 Equipment Collateral, dated November 30, 2011, by and between Stellaris LLC, James Construction Group LLC and JPMorgan Chase Bank, N.A. (22)
Exhibit 10.45	Amendment No. 3 to the Master Loan and Security Agreement Loan and Security Agreement, dated November 30, 2011, by and among James Construction Group LLC, Stellaris LLC, ARB Inc. and Fifth Third Bank (22)
Exhibit 10.46	Promissory Note, dated November 30, 2011, by and among James Construction Group LLC, Stellaris LLC, ARB Inc. and Fifth Third Bank (22)
Exhibit 10.47	Master Loan and Security Agreement, dated December 21, 2011, by and among ARB, Inc. and Banc of America Leasing & Capital, LLC (23)
Exhibit 10.48	Equipment Security Note, dated December 21, 2011, by and among ARB, Inc., Stellaris LLC, Rockford Corporation and Banc of America Leasing & Capital, LLC (23)
Exhibit 10.49	Addendum to Master Loan and Security Agreement, dated December 21, 2011, by and among ARB, Inc., Stellaris LLC, Rockford Corporation and Banc of America Leasing & Capital, LLC (23)
Exhibit 10.50	Guaranty, dated December 21, 2011, by and among Primoris Services Corporation and Banc of America Leasing & Capital, LLC (23)
Exhibit 10.51	General Indemnity Agreement, dated January 24, 2012, by and among Primoris Services Corporation, ARB, Inc. ARB Structures, Inc., OnQuest, Inc., OnQuest Heaters, Inc. Born Heaters Canada ULC, Cardinal Contractors, Inc., Cardinal Southeast, Inc., Stellaris, LLC, GML Coatings, LLC, James Construction Group, LLC, Juniper Rock Corporation, Rockford Corporation; Alaska Continental Pipeline, Inc., All Day Electric Company, Inc. Primoris Renewables, LLC, Rockford Pipelines Canada, Inc. and Chubb Group of Insurance Companies (24)
Exhibit 10.52	Fifth Amendment to Loan and Security Agreement, dated April 4, 2012, by and among Primoris Services Corporation and The PrivateBank and Trust Company (25)

Exhibit 10.53	Equipment Security Note, dated June 20, 2012, by and among Stellaris, LLC, James Construction Group, LLC and Banc of America Leasing & Capital, LLC (26)
Exhibit 10.54	Amendment Number 1 to Master Loan and Security Agreement, dated June 20, 2012, by and among Stellaris, LLC, James Construction Group, LLC and Banc of America Leasing & Capital, LLC (26)
Exhibit 10.55	Seventh Amendment to Loan and Security Agreement, dated July 18, 2012, by and among Primoris Services Corporation and The PrivateBank and Trust Company (27)
Exhibit 10.56	Eighth Amendment to Loan and Security Agreement, dated October 29, 2012, by and among Primoris Services Corporation and The PrivateBank and Trust Company (28)
Exhibit 10.57	Master Loan and Security Agreement, dated November 1, 2012, by and between Stellaris, LLC and Banc of America Leasing & Capital, LLC (29)
Exhibit 10.58	Amendment to Master Loan and Security Agreement, dated November 7, 2012, by and among Stellaris, LLC, James Construction Group, LLC, Miller Springs Materials, LLC, Primoris Energy Services Corporation and Banc of America Leasing & Capital, LLC (29)
Exhibit 10.59	Equipment Security Note, dated November 1, 2012, by and among Stellaris, LLC, James Construction Group, LLC, Miller Springs Materials, LLC, Primoris Energy Services Corporation and Banc of America Leasing & Capital, LLC (29)
Exhibit 10.60	Loan Agreement, dated December 13, 2012, by and between Stellaris, LLC and Q3 Contracting, Inc. and RBS Asset Finance, Inc. (30)
Exhibit 10.61	Note, dated December 13, 2012, by and among Stellaris, LLC and Q3 Contracting, Inc. and RBS Asset Finance, Inc. (30)
Exhibit 10.62	Guaranty, dated December 13, 2012, by and among Primoris Services Corporation and RBS Asset Finance, Inc. (30)
Exhibit 10.63	Credit Agreement, dated December 28, 2012, by and among Primoris Services Corporation and The PrivateBank and Trust Company, The Bank of the West and IBERIABANK Corporation (31)
Exhibit 10.64	Note Purchase and Private Shelf Agreement, dated December 28, 2012, by and among Primoris Services Corporation and Prudential Investment Management, Inc. and certain Prudential affiliates (31)
Exhibit 14.1	Code of Ethics and Business Conduct (32)
Exhibit 21.1	Subsidiaries and equity investments of Primoris Services Corporation (*)
Exhibit 23.1	Consent of Moss Adams LLP (*)
Exhibit 31.1	Certification of chief executive officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (*)
Exhibit 31.2	Certification of chief financial officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (*)
Exhibit 32.1	Certification of chief executive officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (*)
Exhibit 32.2	Certification of chief financial officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (*)
Exhibit 101 INS	XBRL Instance Document (*)
Exhibit 101 SCH	XBRL Taxonomy Extension Schema Document (*)
Exhibit 101 CAL	XBRL Taxonomy Extension Calculation Linkbase Document (*)
Exhibit 101 LAB	XBRL Taxonomy Extension Label Linkbase Document (*)
Exhibit 101 PRE	XBRL Taxonomy Extension Presentation Linkbase Document (*)
Exhibit 101 DEF	XBRL Taxonomy Extension Definition Linkbase Document (*)

(#)	Management contract or compensatory plan, contract or arrangement.
(*)	Filed herewith.
(1)	Filed as an exhibit to our Current Report on Form 8-K, as filed with the SEC on February 20, 2008, and which is incorporated herein by reference.
(2)	Filed as an exhibit to our Registration Statement on Form S-4/A (Amendment No. 3) (File No. 333-150343), as filed with the SEC on July 1, 2008, and which is incorporated herein by reference.
(3)	Filed as an exhibit to our Current Report on Form 8-K, as filed with the SEC on November 23, 2009, and which is incorporated herein by reference.
(4)	Filed as an exhibit to our Current Report on Form 8-K, as filed with the SEC on December 23, 2009, and which is incorporated herein by reference.
(5)	Filed as an exhibit to our Current Report on Form 8-K/A (Amendment No. 1), as filed with the SEC on January 22, 2010, and which is incorporated herein by reference.
(6)	Filed as an exhibit to our Current Report on Form 8-K, as filed with the SEC on July 8, 2010, and which is incorporated herein by reference.
(7)	Filed as an exhibit to our Current Report on Form 8-K, as filed with the SEC on November 12, 2010, and which is incorporated herein by reference.
(8)	Filed as an exhibit to our Current Report on Form 8-K, as filed with the SEC on November 15, 2012, and which is incorporated herein by reference.
(9)	Filed as an exhibit to our Quarterly Report on Form 10-Q, as filed with the SEC on August 12, 2009, and which is incorporated herein by reference.
(10)	Filed as an exhibit to our Current Report on Form 8-K, as filed with the SEC on August 6, 2008, and which is incorporated herein by reference.
(11)	Filed as exhibit to our Current Report on Form 8-K, as filed with the SEC on December 17, 2009, and which is incorporated herein by reference.
(12)	Filed as an exhibit to our Registration Statement on Form S-1 (File No. 333-134694), as filed with the SEC on June 2, 2006, and which is incorporated herein by reference.
(13)	Attached as an annex to our Registration Statement on Form S-4/A (Amendment No. 4) (File No. 333-150343), as filed with the SEC on July 9, 2008, and which is incorporated herein by reference.
(14)	Filed as an exhibit to our Current Report on Form 8-K, as filed with the SEC on November 4, 2009, and which is incorporated herein by reference.
(15)	Filed as an exhibit to our Current Report on Form 8-K, as filed with the SEC on October 6, 2010, and which is incorporated herein by reference.
(16)	Filed as an exhibit to our Current Report on Form 8-K, as filed with the SEC on July 1, 2010, and which is incorporated herein by reference.
(17)	Filed as an exhibit to our Current Report on Form 8-K, as filed with the SEC on September 8, 2010, and which is incorporated herein by reference.
(18)	Filed as an exhibit to our Current Report on Form 8-K, as filed with the SEC on November 18, 2010, and which is incorporated herein by reference.
(19)	Filed as an exhibit to our Current Report on Form 8-K, as filed with the SEC on January 6, 2011, and which is incorporated herein by reference.
(20)	Filed as an exhibit to our Annual Report on Form 10-K, as filed with the SEC on March 16, 2011, and which is incorporated herein by reference.
(21)	Filed as an exhibit to our Current Report on Form 8-K, as filed with the SEC on October 25, 2011, and which is incorporated herein by reference.
(22)	Filed as an exhibit to our Current Report on Form 8-K, as filed with the SEC on December 14, 2011, and which is incorporated herein by reference.
(23)	Filed as an exhibit to our Current Report on Form 8-K, as filed with the SEC on December 30, 2011, and which is incorporated herein by reference.
(24)	Filed as an exhibit to our Annual Report on Form 10-K, as filed with the SEC on March 5, 2012, and which is incorporated herein by reference.
(25)	Filed as an exhibit to our Annual Report on Form 10-Q, as filed with the SEC on May 9, 2012, and which is incorporated herein by reference.
(26)	Filed as an exhibit to our Current Report on Form 8-K, as filed with the SEC on June 28, 2012, and which is incorporated herein by reference.
(27)	Filed as an exhibit to our Current Report on Form 8-K, as filed with the SEC on July 23, 2012, and which is incorporated herein by reference.
(28)	Filed as an exhibit to our Current Report on Form 8-K, as filed with the SEC on November 2, 2012, and which is incorporated herein by reference.
(29)	Filed as an exhibit to our Current Report on Form 8-K, as filed with the SEC on November 9, 2012, and which is incorporated herein by reference.
(30)	Filed as an exhibit to our Current Report on Form 8-K, as filed with the SEC on December 18, 2012, and which is incorporated herein by reference.
(31)	Filed as an exhibit to our Current Report on Form 8-K, as filed with the SEC on January 7, 2013, and which is incorporated herein by reference.
(32)	Filed as an exhibit to our Annual Report on Form 10-K, as filed with the SEC on March 11, 2010, and which is incorporated herein by reference

EX-21.1

Exhibit 21.1

Subsidiaries and Equity Investments of the Registrant

Subsidiary	Jurisdiction of Organization
ARB, Inc.	California
ARB Structures, Inc.	California
ARB Chile, Ltda.	Chile
Alaska Continental Pipeline. Inc.	Delaware
All Day Electric Company, Inc.	California (1)
Born Heaters Canada, ULC	Alberta, Canada
Cardinal Contractors, Inc.	Florida
Cardinal Mechanical, Inc.	Texas
Cravens Services, Inc.	Texas
GML Coatings, LLC	Florida
James Construction Group, LLC	Florida
Juniper Rock Corporation	California
OnQuest, Inc.	California
OnQuest Heaters, Inc.	Delaware
Primoris Renewables, LLC	California
Primoris Energy Services Corporation	Texas (2)
Q3 Contracting, Inc.	Minnesota
Rockford Corporation	Oregon
Saxon Construction, Inc.	Texas
Stellaris, LLC	Nevada

(1)In December 2010, the Registrant had a 49% equity interest in this entity.  The Registrant purchased the remaining 51% of equity in March 2011.

(2)Under a trademark license agreement, Primoris Energy Services Corporation may use the tradename “Sprint Pipeline Services” for a three year period ending March 2015.

With the exception of Primoris Energy Services Corporation, the subsidiaries do not conduct business under any names other than those set forth above.

Equity Investments of the Registrant

Organization	Jurisdiction of Organization	Registrant’s Equity Interest
Alvah, Inc.	California	49	%
Blythe Power Constructors	California	50	%
Otay Mesa Power Partners	California	40	%
St.-Bernard Levee Partners	Delaware	30	%
WesPac Energy, LLC	Nevada	50	%

The above noted entities do not conduct business under any names other than those set forth above.

EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in the following Registration Statements of Primoris Services Corporation of our report dated March 7, 2013, relating to the consolidated financial statements of Primoris Services Corporation (the “Company”), and the effectiveness of the Company’s internal control over financial reporting, appearing in this Annual Report (Form 10-K) for the year ended December 31, 2012:

·Registration Statement on Form S-8 (No. 333-159491) pertaining to the Long-Term Incentive Equity Plan of Primoris Services Corporation;

·Registration Statement on Form S-3 (No 333-161331) pertaining to the registration of common stock; and

·Registration Statement on Form S-3 (No 333-174602) pertaining to the registration of common stock.

/s/ Moss Adams LLP

March 7, 2013

Irvine, California

EX-31.1

Exhibit 31.1

Certification of Chief Executive Officer

RULE 13a-14(a)/15d-14(a) CERTIFICATION PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Brian Pratt, certify that:

1.I have reviewed this Annual Report on Form 10-K for the period ended December 31, 2012 of Primoris Services Corporation;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 7, 2013

/s/ BRIAN PRATT

Brian Pratt

Chief Executive Officer and President

EX-31.2

Exhibit 31.2

Certification of Chief Financial Officer

RULE 13a-14(a)/15d-14(a) CERTIFICATION PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Peter J. Moerbeek, certify that:

1.I have reviewed this Annual Report on Form 10-K for the period ended December 31, 2012, of Primoris Services Corporation;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 7, 2013

/s/ PETER J. MOERBEEK

Peter J. Moerbeek

Executive Vice President, Chief Financial Officer

EX-32.1

Exhibit 32.1

Certification of Chief Executive Officer

Certification Pursuant to Section 906

of the Sarbanes-Oxley Act of 2002

(18 U.S.C. Section 1350)

In connection with the Annual Report of Primoris Services Corporation (the “Company”) on Form 10-K for the period ended December 31, 2012, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Brian Pratt, Chief Executive Officer and President of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

In witness whereof, the undersigned has executed and delivered this certificate as of the date set forth opposite his signature below.

Date: March 7, 2013	/s/ BRIAN PRATT
	Brian Pratt
	Chief Executive Officer and President

The foregoing certification is being furnished solely to accompany the Report pursuant to 18. U.S.C. Section 1350, and is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not to be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing. A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

Certification of Chief Financial Officer

Certification Pursuant to Section 906

of the Sarbanes-Oxley Act of 2002

(18 U.S.C. Section 1350)

In connection with the Annual Report of Primoris Services Corporation (the “Company”) on Form 10-K for the period ended December 31, 2012, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Peter J. Moerbeek, Executive Vice President, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

In witness whereof, the undersigned has executed and delivered this certificate as of the date set forth opposite his signature below.

Date: March 7, 2013	/s/ PETER J. MOERBEEK
	Peter J. Moerbeek
	Executive Vice President, Chief Financial Officer

The foregoing certification is being furnished solely to accompany the Report pursuant to 18. U.S.C. Section 1350, and is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not to be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing. A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities Exchange Commission or its staff upon request.

XML

Intangible Assets (Tables)

12 Months Ended

Dec. 31, 2012

Intangible Assets

Summary of intangible asset categories, amounts and the average amortization periods

	Amortization		Amount
	Period		2012		2011
Tradename	3 and 10 years		$	23,586	$	18,791
Non-compete agreements	2 to 5 years		4,130		4,695
Customer relationships	5 to 15 years		24,212		8,181
Backlog	0.75 years		50		354
		Total	$	51,978	$	32,021

Schedule of estimated amortization expense for intangible assets

For the Years Ending December 31,	Estimated Intangible Amortization Expense
2013	$	7,020
2014	6,986
2015	5,834
2016	5,330
2017	5,318
Thereafter	21,490
	$	51,978

XML

Summary of Significant Accounting Policies (Details 4)	1 Months Ended					12 Months Ended
	Aug. 31, 2012	Mar. 31, 2012	Feb. 29, 2012	Aug. 31, 2011	Mar. 31, 2011	Dec. 31, 2012	Dec. 31, 2011
Share-based payments and stock-based compensation
Shares of common stock reserved for issuance upon exercise of all future stock option grants, SARS and grants of restricted shares under the 2008 Equity Plan						1,270,744
Issuance of employee LTI shares (in shares)		111,790			94,966	111,790	94,966
Period of restriction on trade for shares issued to employees under the Primoris Long-term Retention Plan						6 months
Shares of common stock issued as a part of quarterly compensation of non-employee members of the Board of Directors	15,280		12,395	14,825		27,675	14,825
Period of restriction on trade for shares issued to non-employee members of the board of directors under the Primoris Long-term Retention Plan						1 year
Minimum
Property and equipment
Estimated useful lives of the related assets						3 years
Maximum
Property and equipment
Estimated useful lives of the related assets						30 years

XML

Earnings Per Share (Tables)

12 Months Ended

Dec. 31, 2012

Earnings Per Share

Schedule of computation of basic and diluted earnings per share

	2012			2011		2010
Numerator:
Net income	$	58,267		$	58,559	$	33,616
Net income attributable to noncontrolling interests	(1,511		)	—		—
Net income attributable to Primoris	$	56,756		$	58,559	$	33,616
Denominator (shares in thousands):
Weighted average shares for computation of basic earnings per share	51,391			50,707		42,694
Dilutive effect of warrants and units (1)	—			51		908
Dilutive effect of contingently issuable shares (2)	—			386		989
Dilutive effect of shares issued to independent directors	11			9		—
Dilutive effect of JCG convertible preferred shares (3)	—			—		2,287
Dilutive effect of shares to be issued to Q3C sellers (4)	4			—		—
Weighted average shares for computation of diluted earnings per share	51,406			51,153		46,878
Earnings per share:
Basic	$	1.10		$	1.15	$	0.79
Diluted	$	1.10		$	1.14	$	0.72

(1) Represents the dilutive effect of common stock warrants available under the Unit Purchase Option (“UPO”).  See Note 23 — “Stockholders’ Equity”.

(2) Represents the dilutive effect of the following contingency arrangements which were met at the end of each year, but for which shares of common stock were not issued until the following year:

a) On March 25, 2010, a total of 2,499,975 shares were issued in accordance with the 2009 merger agreement between Rhapsody and Former Primoris.

b) The effect of 74,906 unregistered shares of common stock issued in March 2010 as a result of Cravens Services, Inc. (a small acquisition made in 2009) meeting a defined performance target in 2009.

c) A total of 1,095,646 unregistered shares of common stock issued to JCG’s sellers in March 2011 as a result of JCG meeting a defined performance target in 2010.

d) A total of 494,095 unregistered shares of common stock issued to Rockford’s former stockholders in March 2011 as a result of Rockford meeting a defined performance target in 2010 and an additional 232,637 unregistered shares of common stock issued in March 2012 as a result of Rockford meeting a defined performance target in 2011.

(3) Represents the dilutive effect of the conversion of preferred stock into 8,185,278 shares of common stock.  The conversion was approved at a special meeting of the stockholders held on April 12, 2010.

(4) Represents the dilutive effect of the 29,273 unregistered shares of common stock to be issued as part of the purchase consideration for the Q3C acquisition.  The shares were issued in February 2013.

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Commitments and Contingencies (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Future minimum lease payments required under non-cancelable operating leases
2013	$ 11,532
2014	9,605
2015	7,309
2016	4,658
2017	2,661
Thereafter	5,252
Total	41,017
Total lease expense	10,684	9,530	9,856
Lease payments to related party	1,342	1,278	1,151
Real Property
Future minimum lease payments required under non-cancelable operating leases
2013	2,728
2014	2,001
2015	1,829
2016	1,465
2017	1,392
Thereafter	2,944
Total	12,359
Real Property (Related Party)
Future minimum lease payments required under non-cancelable operating leases
2013	1,597
2014	1,563
2015	941
2016	775
2017	786
Thereafter	2,308
Total	7,970
Equipment
Future minimum lease payments required under non-cancelable operating leases
2013	7,207
2014	6,041
2015	4,539
2016	2,418
2017	483
Total	$ 20,688

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Summary of Significant Accounting Policies (Details 5) (USD $) In Thousands, except Share data, unless otherwise specified	12 Months Ended			1 Months Ended	0 Months Ended				1 Months Ended	12 Months Ended	1 Months Ended	12 Months Ended			0 Months Ended	12 Months Ended
	Dec. 31, 2009	Dec. 31, 2012	Dec. 31, 2010	Mar. 31, 2011 JCG 2010 earnout target	Nov. 12, 2010 Rockford	Dec. 31, 2012 Rockford	Dec. 31, 2011 Rockford	Nov. 30, 2010 Rockford	Mar. 31, 2011 Rockford 2010 earnout target	Dec. 31, 2012 Rockford 2010 earnout target	Apr. 30, 2012 Rockford 2011 earnout target	Dec. 31, 2012 Rockford 2011 earnout target	Dec. 31, 2011 Rockford 2011 earnout target	Dec. 31, 2012 Rockford 2012 earnout target	Mar. 12, 2012 Sprint	Dec. 31, 2012 Sprint	Jun. 30, 2012 Sprint	Dec. 31, 2012 Sprint 2012 earnout target	Mar. 12, 2012 Sprint 2012 earnout target
Contingent earnout liabilities
Number of shares of common stock issued	81,853			1,095,646	1,605,709				494,095	494,095	232,637	232,637			62,052	62,052
Cash payment made		$ 86,207	$ 39,120								$ 3,450				$ 19,228		$ 1,969
Earnout target liability						$ 1,500	$ 5,818	$ 14,300					$ 6,900	$ 6,900				$ 4,000	$ 3,455

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Related Party Transactions (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended																						12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2012 SIGI	Dec. 31, 2011 SIGI	Dec. 31, 2010 SIGI	Dec. 31, 2012 Pluris, LLC	Dec. 31, 2011 Pluris, LLC	Dec. 31, 2010 Pluris, LLC	Dec. 31, 2012 Roger Newnham	Dec. 31, 2011 Roger Newnham	Dec. 31, 2010 Roger Newnham	Dec. 31, 2012 Lemmie Rockford	Dec. 31, 2011 Lemmie Rockford	Dec. 31, 2012 OMPP	Dec. 31, 2011 OMPP	Dec. 31, 2010 OMPP	Dec. 31, 2012 St. - Bernard Levee Partners	Dec. 31, 2011 St. - Bernard Levee Partners	Dec. 31, 2010 St. - Bernard Levee Partners	Dec. 31, 2012 Quality RE Partners item	Nov. 17, 2012 Alvah, Inc.	Dec. 31, 2012 Alvah, Inc. ARB	Dec. 31, 2012 Alvah, Inc. Q3C
Related party transactions
Lease payments to related party	$ 1,342	$ 1,278	$ 1,151	$ 929	$ 910	$ 892	$ 362	$ 5,680		$ 292	$ 277	$ 252	$ 90	$ 90							$ 31
Amount of agreement to construct a wastewater facility									6,100
Related party revenues recognized	502	5,681	1,568												0	0	83	0	0	472
Number of former shareholders owning leased property																					3
Number of current employees owning leased property																					2
Membership interest (as a percent)																						49.00%
Subcontractor payments made to related party																							$ 6,377	$ 537

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Multiemployer Plans (Tables)

12 Months Ended

Dec. 31, 2012

Multiemployer Plans

Schedule of the entity's contributions to different pension funds

	EIN/Pension Plan	Pension Protection Act Zone Status		FIP/RP Status	Surcharge	Collective Bargaining Agreement	Contributions of the Company
Pension Fund Name	Number	2012	2011	Pending/Implemented	Imposed	Expiration Date	2012		2011		2010
So Cal Pipetrades Trust Funds	51-6108443/001	Green as of January 1, 2011	Green as of January 1, 2010	No	No	6/30/2014	5,298		2,931		1,394
Laborers Pension Trust Fund for Northern California	94-6277608/001	Yellow as of June 1, 2012	Yellow as of June 1, 2011	Yes	No	6/30/2015	$	4,816	$	3,501	$	1,237
Construction Laborers Pension Trust for Southern California	43-6159056/001	Green as of January 1, 2011	Green as of January 1, 2010	No	No	6/30/2015	2,952		2,373		1,694
Central Pension Fund of the International Union of Operating Engineers and Participating Employers	36-6052390/001	Green as of February 1, 2011	Green as of February 1, 2010	No	No	5/31/2014	2,206		1,797		946
Laborers International Union of North America National (Industrial) Pension Fund	52-6074345/001	Red as of March 31, 2011	Red as of March 31, 2011	Yes	Yes (1)	5/31/2014	1,995		1,740		826
Pipeline Industry Benefit Fund	73-6146433/001	Green as of January 1, 2011	Green as of January 1, 2010	No	No	5/31/2014	1,747		1,793		1,110
Boilermaker-Blacksmith National Pension Trust	48-6168020/001	Yellow as of January 1, 2011	Yellow as of January 1, 2010	Yes	No	9/30/2014	1,502		1,035		469
Northern California Pipe Trades Pension Plan	94-3190386/002	Green as of January 1, 2011	Green as of January 1, 2010	No	No	4/30/2014	1,638		1,741		283
				Contributions for significant plans			$	22,154	$	16,911	$	7,959
				Contributions to other multiemployer plans			7,949		7,271		4,631
				Total contributions made			$	30,103	$	24,182	$	12,590

(1) Temporary surcharge of 5% of total contributions imposed during the period June 1, 2010 through December 31, 2010. Effective January 1, 2011, the surcharge was increased to 10% of total contributions. Under the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010, the plan adopted to amortize the fund’s 2008 investment losses over a 29 year period (rather than 15 years) and the 2008 investment losses will be recognized for funding purposes over a 10 year smoothing period (rather than 5 years). During this period, benefits cannot be increased.

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Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2012

Fair Value Measurements

Schedule of financial assets and certain liabilities that are required to be measured at fair value

			Fair Value Measurements at Reporting Date
	Amount Recorded on Balance Sheet		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Assets as of December 31, 2012:
Cash and cash equivalents	$	157,551	$	157,551	—	—
Short-term investments	$	3,441	$	3,441	—	—
Liabilities as of December 31, 2012:
Contingent consideration	$	—	—		—	$	23,431
Assets as of December 31, 2011:
Cash and cash equivalents	$	120,306	$	120,306	—	—
Short-term investments	$	23,000	$	23,000	—	—
Liabilities as of December 31, 2011:
Contingent consideration	$	—	—		—	$	12,718

Schedule of the Company's contingent consideration liability level three fair value measurements rollforward

	Significant Unobservable Inputs (Level 3)
Contingent Consideration
Balance at December 31, 2011	$	12,718
Additions:
Sprint acquisition	6,200
Saxon acquisition	1,950
Q3C acquisition	7,448
Change in fair value of contingent consideration	2,015
Reductions:
Contingent consideration payment to Rockford sellers	(6,900		)
Balance at December 31, 2012	$	23,431

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Income Taxes (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Current provision (benefit)
Federal	$ 27,524	$ 24,791	$ 18,491
State	7,125	5,697	4,663
Foreign	67	621	1,081
Total	34,716	31,109	24,235
Deferred provision (benefit)
Federal	(451)	6,488	(1,951)
State	(366)	849	(189)
Foreign	(62)	(122)	(36)
Total	(879)	7,215	(2,176)
Change in valuation allowance		150
Total	33,837	38,174	22,059
Reconciliation of income tax expense compared to the amount of income tax expense that would result by applying U.S. federal statutory income tax rate to pre-tax income
U.S. federal statutory income tax rate (as a percent)	35.00%	35.00%	35.00%
State taxes, net of federal income tax impact (as a percent)	4.87%	4.33%	4.52%
Foreign tax credit (as a percent)	(0.01%)	(0.52%)	(1.88%)
Canadian income tax (as a percent)	0.01%	0.52%	1.88%
Domestic production activities deduction (as a percent)	(2.97%)	(2.79%)	(3.30%)
Other items (as a percent)	0.45%	2.92%	3.40%
Effective tax rate on income before provision for income taxes excluding income attributable to noncontrolling interests (as a percent)	37.35%	39.46%	39.62%
Impact of income from noncontrolling interests on effective tax rate (as a percent)	(0.61%)
Effective tax rate on income before provision for income taxes and noncontrolling interests (as a percent)	36.74%	39.46%	39.62%
Deferred tax assets:
Accrued workers compensation	4,973	4,023
Insurance reserves	1,114	2,657
Other accrued liabilities	10,434	6,604
State income taxes	1,537	1,605
Capital loss carryforward	344	344
Foreign tax credit	662	644
Valuation allowance	(344)	(344)		(344)
Total deferred tax assets	18,720	15,533
Deferred tax liabilities
Depreciation and amortization	(26,661)	(24,659)
Prepaid expenses and other	(1,600)	(1,294)
Total deferred tax liabilities	(28,261)	(25,953)
Total	$ (9,541)	$ (10,420)
Minimum period of statute of limitations of state and foreign jurisdictions	3 years
Maximum period of statute of limitations of state and foreign jurisdictions	5 years

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Reportable Operating Segments (Details 2) (USD $) In Thousands, unless otherwise specified	3 Months Ended								12 Months Ended
	Dec. 31, 2012	Sep. 30, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2011	Sep. 30, 2011	Jun. 30, 2011	Mar. 31, 2011	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Revenues and total assets by geographic area
Revenues	$ 480,883	$ 431,842	$ 337,436	$ 291,573	$ 373,066	$ 375,483	$ 351,956	$ 359,645	$ 1,541,734	$ 1,460,150	$ 941,765
% of revenue									100.00%	100.00%	100.00%
Total Assets	931,207				728,413				931,207	728,413
United States
Revenues and total assets by geographic area
Revenues									1,530,819	1,447,863	920,051
% of revenue									99.30%	99.20%	97.70%
Total Assets	920,872				719,028				920,872	719,028
Non-United States
Revenues and total assets by geographic area
Revenues									10,915	12,287	21,714
% of revenue									0.70%	0.80%	2.30%
Total Assets	$ 10,335				$ 9,385				$ 10,335	$ 9,385

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Fair Value Measurements (Details 2) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Rollforward of contingent consideration liability level three fair value measurements
Change in fair value of contingent consideration	$ 1,435	$ (2,927)	$ (290)
Contingent consideration
Rollforward of contingent consideration liability level three fair value measurements
Balance at the beginning of the period	12,718
Change in fair value of contingent consideration	2,015
Balance at the end of the period	23,431
Additional information
Number of unobservable inputs	2
Minimum probability of acquired entity meeting contractual operating performance target	75.00%
Contingent consideration | Sprint acquisition
Rollforward of contingent consideration liability level three fair value measurements
Additions	6,200
Contingent consideration | Saxon Group
Rollforward of contingent consideration liability level three fair value measurements
Additions	1,950
Contingent consideration | Q3C acquisition
Rollforward of contingent consideration liability level three fair value measurements
Additions	7,448
Contingent consideration | Rockford
Rollforward of contingent consideration liability level three fair value measurements
Reductions	$ (6,900)

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Company Retirement Plans (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
401(k) Plan
Company retirement plans
Maximum contribution by employees (as a percent)	100.00%
Employer match of employee contributions on first level of eligible compensation (as a percent)	100.00%
Percentage of eligible compensation, first level, matched by employer	3.00%
Employer match of employee contributions on the second level of eligible compensation (as a percent)	50.00%
Percentage of eligible compensation, second level, partially matched by employer	2.00%
Employer's contribution	$ 2,267	$ 1,963	$ 1,734
Born Heaters Canada, ULC RRSP-DPSP Plan
Company retirement plans
Employer match of employee contributions on first level of eligible compensation (as a percent)	100.00%
Percentage of eligible compensation, first level, matched by employer	3.00%
Employer match of employee contributions on the second level of eligible compensation (as a percent)	50.00%
Percentage of eligible compensation, second level, partially matched by employer	2.00%
Employer's contribution	$ 69	$ 78	$ 86
Number of components of the plan	2
Number of years of employment as a vesting period of DPSP portion	1 year

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Earnings Per Share (Details 2)	0 Months Ended	12 Months Ended	1 Months Ended		0 Months Ended	1 Months Ended	12 Months Ended	1 Months Ended	12 Months Ended	1 Months Ended
	Apr. 12, 2010	Dec. 31, 2009	Mar. 31, 2010 Former Primoris 2009 earnout target	Mar. 31, 2010 Craven 2009 earnout target	Nov. 12, 2010 Rockford	Mar. 31, 2011 Rockford 2010 earnout target	Dec. 31, 2012 Rockford 2010 earnout target	Apr. 30, 2012 Rockford 2011 earnout target	Dec. 31, 2012 Rockford 2011 earnout target	Mar. 31, 2011 JCG 2010 earnout target	Feb. 28, 2013 Q3 Contracting
Earnings per share
Number of unregistered shares of common stock issued		81,852.78	2,499,975	74,906	1,605,709	494,095	494,095	232,637	232,637	1,095,646	29,273
Shares of common stock issued on conversion of preferred stock	8,185,278

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Deferred Compensation Agreements (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011
Primoris Long-Term Retention Plan
Deferred compensation agreements
Percentage of participant's annual earned bonus deferred	50.00%
Period of deferral of annual earned bonus	1 year
Total deferred compensation liability	$ 4,298	$ 4,281
Maximum percentage of participant's prior year earned bonus amount up to which common stock can be purchased in a stock purchase plan	0.1667%
Percenatge of average market closing prices used in determining number of common stock that could be purchased by participants	75.00%
JCG Stakeholder Incentive Plan
Deferred compensation agreements
Total deferred compensation liability	$ 1,615	$ 1,600
Vesting period	5 years
Period of payment of deferred benefit amount plus interest in equal monthly installments	3 years

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Commitments and Contingencies (Details 2) (USD $) In Thousands, unless otherwise specified						12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Nov. 30, 2011	Dec. 31, 2012 Letters of credit	Dec. 31, 2011 Letters of credit	Dec. 31, 2012 Bonding	Dec. 31, 2011 Bonding	Dec. 31, 2010 Bonding
Commitments and contingencies
Total commercial letters of credit outstanding				$ 6,168	$ 11,798
Bid and completion bonds issued and outstanding						1,298,589	1,105,933	849,288
Withdrawal liability recorded	$ 7,500	$ 5,000	$ 7,500

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Deferred Compensation Agreements

12 Months Ended

Dec. 31, 2012

Deferred Compensation Agreements

Deferred Compensation Agreements

Note 19—Deferred Compensation Agreements

Primoris Long-Term Retention Plan—The Company adopted a long-term incentive plan for certain senior managers and executives.  The voluntary plan provides for the deferral of one half of the participant’s annual earned bonus for one year.  Except in the case of death, disability or involuntary separation from service, the deferred compensation is vested to the participant only if actively employed by the Company on the payment date of bonus amounts the following year.  The amount of compensation deferred under this plan is calculated each year.  Total deferred compensation liability under this plan as of December 31, 2012 and 2011 was $4,298 and $4,281, respectively.

Participants in the long term incentive plan may elect to purchase Company common stock at a discounted amount.  For bonuses earned in 2012 and 2011, the participants could purchase up to one sixth of their bonus amount, calculated as 75% of the average market closing prices in December 2012 and 2011, respectively.

JCG Stakeholder Incentive Plan — In December 2012 and 2011, JCG maintained a deferred compensation plan for senior management employees.  The plan provided for annual vesting over a five-year period.  Once vested and upon a triggering event, such as termination, death or disability, the deferred benefit amount plus interest is paid in equal monthly installments over three years.  The amount of compensation deferred under the plan is calculated each year.  Total deferred compensation liability under this plan at December 31, 2012 and 2011 was $1,615 and $1,600, respectively.

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Nature of Business (Details)	12 Months Ended	1 Months Ended
	Dec. 31, 2012 item	Mar. 31, 2012 Sprint
Asset purchase agreement
Number of acquisitions	4
Period for which the acquiree name is allowed to be used		3 years

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Credit Arrangements (Tables)

12 Months Ended

Dec. 31, 2012

Credit Arrangements

Schedule of credit facilities and long-term debt

	2012			2011
Commercial notes payable to a bank with interest rates from 2.16% to 4.12%. Monthly principal and interest payments are due in the amount of $518, with the final payment due December 23, 2016. The notes are secured by certain construction and automotive equipment of the Company	$	18,988		$	26,243
Commercial note payable to a bank with an interest rate of 4.71%. Principal and interest payments are due in the amount of $140 per month until the maturity date on July 1, 2017. The note is secured by certain construction equipment of the Company	6,800			8,125
Construction equipment note payable to a commercial equipment finance company, with an interest rate of 3.67% per annum. Principal and interest payments are due in the amount of $101 per month until the maturity date on December 31, 2017. The note is secured by certain construction equipment of the Company	5,550			6,543
Commercial notes payable to a bank with interest rates from 2.63% to 3.50%. Monthly principal and interest payments are due in the amount of $226, with the final payment due June 15, 2017. The notes are secured by certain construction and automotive equipment of the Company	10,441			12,811
Construction equipment note payable to a commercial equipment finance company, with an interest rate of 2.14% per annum. Principal and interest payments are due in the amount of $281 per month until the maturity date on November 30, 2016. The note is secured by certain construction equipment of the Company	12,935			16,000
Construction equipment notes payable to a commercial equipment finance company, with an interest rate of 2.23% to 2.44% per annum. Principal and interest payments are due in the amount of $294 per month until the maturity date on November 1, 2019. These notes are secured by certain construction and automotive equipment of the Company	21,713			—
Commercial notes payable to a commercial equipment finance company, with an interest rate of 2.05% to 3.51% per annum. Principal and interest payments are due in the amount of $193 per month until the maturity date on December 21, 2019. The notes are secured by certain construction equipment and real estate of the Company	17,800			—
Construction equipment note payable to a commercial equipment finance company, with an interest rate of 2.06% per annum. Principal and interest payments are due in the amount of $68 per month until the maturity date on August 13, 2017. The note is secured by certain construction equipment of the Company	3,586			—
Senior Secured Notes payable to an insurance finance company, with an interest rate of 3.65% per annum. Quarterly interest payments are due starting March 31, 2013. Principal repayments start on December 28, 2016 until the maturity date on December 28, 2022. The notes are secured by the assets of the Company	50,000			—
Total long-term debt	147,813			69,722
Less: current portion	(19,446		)	(13,870		)
Long-term debt, net of current portion	$	128,367		$	55,852

Schedule of maturities of long-term debt

	Year Ending December 31,
2013	$	19,446
2014	20,002
2015	18,605
2016	25,116
2017	15,286
Thereafter	49,358
	$	147,813

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Multiemployer Plans (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended				12 Months Ended												7 Months Ended	12 Months Ended
	Dec. 31, 2012 item	Dec. 31, 2011	Dec. 31, 2010	Nov. 30, 2011	Dec. 31, 2012 So Cal Pipetrades Trust Funds	Dec. 31, 2011 So Cal Pipetrades Trust Funds	Dec. 31, 2010 So Cal Pipetrades Trust Funds	Dec. 31, 2012 Laborers Pension Trust Fund for Northern California	Dec. 31, 2011 Laborers Pension Trust Fund for Northern California	Dec. 31, 2010 Laborers Pension Trust Fund for Northern California	Dec. 31, 2012 Construction Laborers Pension Trust for Southern California	Dec. 31, 2011 Construction Laborers Pension Trust for Southern California	Dec. 31, 2010 Construction Laborers Pension Trust for Southern California	Dec. 31, 2012 Central Pension Fund of the International Union of Operating Engineers and Participating Employers	Dec. 31, 2011 Central Pension Fund of the International Union of Operating Engineers and Participating Employers	Dec. 31, 2010 Central Pension Fund of the International Union of Operating Engineers and Participating Employers	Dec. 31, 2010 Laborers International Union of North America National (Industrial) Pension Fund	Dec. 31, 2012 Laborers International Union of North America National (Industrial) Pension Fund	Dec. 31, 2011 Laborers International Union of North America National (Industrial) Pension Fund	Dec. 31, 2010 Laborers International Union of North America National (Industrial) Pension Fund	Dec. 31, 2012 Pipeline Industry Benefit Fund	Dec. 31, 2011 Pipeline Industry Benefit Fund	Dec. 31, 2010 Pipeline Industry Benefit Fund	Dec. 31, 2012 Boilermaker-Blacksmith National Pension Trust	Dec. 31, 2011 Boilermaker-Blacksmith National Pension Trust	Dec. 31, 2010 Boilermaker-Blacksmith National Pension Trust	Dec. 31, 2012 Northern California Pipe Trades Pension Plan	Dec. 31, 2011 Northern California Pipe Trades Pension Plan	Dec. 31, 2010 Northern California Pipe Trades Pension Plan
Multiemployer plans
Estimated net liability and SG & A expense in connection with the withdrawal	$ 7,500	$ 5,000		$ 7,500
SG&A expense related to plan	2,500
Number of pension plans in which annual contribution was made by the entity during last three years	66
Contributions for significant plans	22,154	16,911	7,959		5,298	2,931	1,394	4,816	3,501	1,237	2,952	2,373	1,694	2,206	1,797	946		1,995	1,740	826	1,747	1,793	1,110	1,502	1,035	469	1,638	1,741	283
Contributions to other multiemployer plans	7,949	7,271	4,631
Total contributions made	$ 30,103	$ 24,182	$ 12,590
Temporary surcharge (as a percent)																	5.00%	10.00%
Investment losses amortization period																		29 years
Investment losses amortization period, before amendment																		15 years
Investment losses smoothing period																		10 years
Investment losses smoothing period, before amendment																		5 years

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Property and Equipment (Tables)

12 Months Ended

Dec. 31, 2012

Property and Equipment

Summary of property and equipment

	2012			2011			Useful Life
Land and buildings	$	24,358		$	18,987		30 years
Leasehold improvements	17,530			5,597			Lease life
Office equipment	2,092			1,203			3 - 5 years
Construction equipment	197,200			158,978			3 - 7 years
Transportation equipment	48,649			28,475			3 - 18 years
	289,829			213,240
Less: accumulated depreciation and amortization	(104,989		)	(83,591		)
Net property and equipment	$	184,840		$	129,649

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Summary of Significant Accounting Policies (Details 2) (USD $)	12 Months Ended
	Dec. 31, 2012 item	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009	Nov. 30, 2011
General matters
Minimum liquidation period of assets in which significant working capital has been invested	1 year
Foreign operations
Assets in Canada	$ 10,335,000	$ 9,385,000
Functional currencies and foreign currency translation
Foreign exchange gain (loss)	(36,000)	(96,000)	250,000
Partnerships and joint ventures
Number of VIE whose financial results are consolidated	1
Cash concentration
Cash balances	157,551,000	120,306,000	115,437,000	90,004,000
Short term CDARS		28,000,000
Treasury bill funds	4,600,000	4,600,000
Cash balances with various financial institutions that are backed by the federal government FDIC program	153,000,000	87,700,000
Collective bargaining agreements
Percentage of labor force subject to collective bargaining agreements	37.00%
Number of collective bargaining agreements	72
Number of collective bargaining agreements requiring renegotiation during the year	19
Multiemployer Plans
Withdrawal liability recorded	7,500,000	5,000,000			7,500,000
Expense recorded as a result of increase in withdrawal liability	2,500,000
Worker's compensation insurance
Self insurance reserve	16,547,000	13,809,000
Accounts receivable
Allowance for doubtful accounts	432,000	363,000
Other contract forms
Provision for estimated loss on uncompleted contracts	764,000	917,000
Significant revisions in contract estimates
Increase in gross profit earned, if revised estimates had been applied in prior year		$ 8,185,000	$ 10,244,000	$ 9,892,000
Increase in per diluted share, if revised estimates had been applied in prior year		$ 0.10	$ 0.12	$ 0.13

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Credit Arrangements (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011
Credit arrangements
Total long-term debt	$ 147,813	$ 69,722
Less: current portion	(19,446)	(13,870)
Long-term debt, net of current portion	128,367	55,852
Scheduled maturities of long-term debt
2013	19,446
2014	20,002
2015	18,605
2016	25,116
2017	15,286
Thereafter	49,358
Total long-term debt	147,813	69,722
Commercial notes, due December 23, 2016
Credit arrangements
Total long-term debt	18,988	26,243
Monthly payment of principal and interest	518	518
Scheduled maturities of long-term debt
Total long-term debt	18,988	26,243
Commercial notes, due December 23, 2016 | Minimum
Credit arrangements
Interest rate (as a percent)	2.16%	2.16%
Commercial notes, due December 23, 2016 | Maximum
Credit arrangements
Interest rate (as a percent)	4.12%	4.12%
Commercial notes, maturing on July 1, 2017
Credit arrangements
Total long-term debt	6,800	8,125
Interest rate (as a percent)	4.71%	4.71%
Monthly payment of principal and interest	140	140
Scheduled maturities of long-term debt
Total long-term debt	6,800	8,125
Construction equipment note, maturing on December 31, 2017
Credit arrangements
Total long-term debt	5,550	6,543
Interest rate (as a percent)	3.67%	3.67%
Monthly payment of principal and interest	101	101
Scheduled maturities of long-term debt
Total long-term debt	5,550	6,543
Commercial notes, due June 15, 2017
Credit arrangements
Total long-term debt	10,441	12,811
Monthly payment of principal and interest	226	226
Scheduled maturities of long-term debt
Total long-term debt	10,441	12,811
Commercial notes, due June 15, 2017 | Minimum
Credit arrangements
Interest rate (as a percent)	2.63%	2.63%
Commercial notes, due June 15, 2017 | Maximum
Credit arrangements
Interest rate (as a percent)	3.50%	3.50%
Construction equipment note, maturing on November 30, 2016
Credit arrangements
Total long-term debt	12,935	16,000
Interest rate (as a percent)	2.14%	2.14%
Monthly payment of principal and interest	281	281
Scheduled maturities of long-term debt
Total long-term debt	12,935	16,000
Construction equipment note, maturing on November 1, 2019
Credit arrangements
Total long-term debt	21,713
Monthly payment of principal and interest	294
Scheduled maturities of long-term debt
Total long-term debt	21,713
Construction equipment note, maturing on November 1, 2019 | Minimum
Credit arrangements
Interest rate (as a percent)	2.23%
Construction equipment note, maturing on November 1, 2019 | Maximum
Credit arrangements
Interest rate (as a percent)	2.44%
Commercial notes, maturing on December 21, 2019
Credit arrangements
Total long-term debt	17,800
Monthly payment of principal and interest	193
Scheduled maturities of long-term debt
Total long-term debt	17,800
Commercial notes, maturing on December 21, 2019 | Minimum
Credit arrangements
Interest rate (as a percent)	2.05%
Commercial notes, maturing on December 21, 2019 | Maximum
Credit arrangements
Interest rate (as a percent)	3.51%
Construction equipment note, maturing on August 13, 2017
Credit arrangements
Total long-term debt	3,586
Interest rate (as a percent)	2.06%
Monthly payment of principal and interest	68
Scheduled maturities of long-term debt
Total long-term debt	3,586
Senior secured notes, maturing on December 28, 2022
Credit arrangements
Total long-term debt	50,000
Interest rate (as a percent)	3.65%
Scheduled maturities of long-term debt
Total long-term debt	$ 50,000

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Costs and Estimated Earnings on Uncompleted Contracts (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Dec. 31, 2011
Costs and Estimated Earnings on Uncompleted Contracts
Costs incurred on uncompleted contracts	$ 3,882,968	$ 2,977,535
Accrued loss provision for estimated losses on uncompleted contracts	764	917
Gross profit recognized	448,928	303,634
Costs and Estimated Earnings on Uncompleted Contracts	4,332,660	3,282,086
Less: billings to date	(4,449,851)	(3,377,949)
Net cost and estimated earnings in excess of billings	(117,191)	(95,863)
Amount included in consolidated balance sheet
Costs and estimated earnings in excess of billings	41,701	41,866
Billings in excess of costs and estimated earnings	(158,892)	(137,729)
Net cost and estimated earnings in excess of billings	$ (117,191)	$ (95,863)

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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2012

Income Taxes

Schedule of components of the provision for income taxes

	2012			2011			2010
Current provision (benefit)
Federal	$	27,524		$	24,791		$	18,491
State	7,125			5,697			4,663
Foreign	67			621			1,081
	$	34,716		$	31,109		$	24,235
Deferred provision (benefit)
Federal	(451		)	6,488			(1,951		)
State	(366		)	849			(189		)
Foreign	(62		)	(122		)	(36		)
	(879		)	7,215			(2,176		)
Change in valuation allowance	—			(150		)	—
Total	$	33,837		$	38,174		$	22,059

Schedule of reconciliation of income tax expense compared to the amount of income tax expense that would result by applying U.S. federal statutory income tax rate to pre-tax income

	2012		2011		2010
U.S. federal statutory income tax rate	35.00	%	35.00	%	35.00	%
State taxes, net of federal income tax impact	4.87	%	4.33	%	4.52	%
Foreign tax credit	(0.01	)%	(0.52	)%	(1.88	)%
Canadian income tax	0.01	%	0.52	%	1.88	%
Domestic production activities deduction	(2.97	)%	(2.79	)%	(3.30	)%
Other items	0.45	%	2.92	%	3.40	%
Effective tax rate on income before provision for income taxes excluding income attributable to noncontrolling interests	37.35	%	39.46	%	39.62	%
Impact of income from noncontrolling interests on effective tax rate	(0.61	)%	—		—
Effective tax rate on income before provision for income taxes and noncontrolling interests	36.74	%	39.46	%	39.62	%

Schedule of tax effect of temporary differences that give rise to deferred income taxes

	2012			2011
Deferred tax assets:
Accrued workers compensation	$	4,973		$	4,023
Insurance reserves	1,114			2,657
Other accrued liabilities	10,434			6,604
State income taxes	1,537			1,605
Capital loss carryforward	344			344
Foreign tax credit	662			644
Valuation allowance	(344		)	(344		)
Total deferred tax assets	18,720			15,533
Deferred tax liabilities
Depreciation and amortization	(26,661		)	(24,659		)
Prepaid expenses and other	(1,600		)	(1,294		)
Total deferred tax liabilities	(28,261		)	(25,953		)
Total	$	(9,541	)	$	(10,420	)

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Fair Value Measurements

12 Months Ended

Dec. 31, 2012

Fair Value Measurements

Fair Value Measurements

Note 3—Fair Value Measurements

ASC Topic 820, “Fair Value Measurements and Disclosures” defines fair value, establishes a framework for measuring fair value in GAAP and requires certain disclosures about fair value measurements.  ASC Topic 820 addresses fair value GAAP for financial assets and financial liabilities that are re-measured and reported at fair value at each reporting period and for non-financial assets and liabilities that are re-measured and reported at fair value on a non-recurring basis.

In general, fair values determined by Level 1 use quoted prices (unadjusted) in active markets for identical assets or liabilities. Fair values determined by Level 2 inputs use data points that are observable such as quoted prices, interest rates and yield curves. Fair values determined by Level 3 inputs are “unobservable data points” for the asset or liability and include situations where there is little, if any, market activity for the asset or liability.

The following table presents, for each of the fair value hierarchy levels identified under ASC Topic 820, the Company’s financial assets and certain liabilities that are required to be measured at fair value at December 31, 2012 and 2011:

			Fair Value Measurements at Reporting Date
	Amount Recorded on Balance Sheet		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Assets as of December 31, 2012:
Cash and cash equivalents	$	157,551	$	157,551	—	—
Short-term investments	$	3,441	$	3,441	—	—
Liabilities as of December 31, 2012:
Contingent consideration	$	—	—		—	$	23,431
Assets as of December 31, 2011:
Cash and cash equivalents	$	120,306	$	120,306	—	—
Short-term investments	$	23,000	$	23,000	—	—
Liabilities as of December 31, 2011:
Contingent consideration	$	—	—		—	$	12,718

Short-term investments consist primarily of Certificates of Deposit (“CDs”) purchased through the CDARS (Certificate of Deposit Account Registry Service) process and U.S. Treasury bills with various financial institutions that are backed by the federal government FDIC program.

Other financial instruments of the Company consist of accounts receivable, accounts payable and certain accrued liabilities.  These financial instruments generally approximate fair value based on their short-term nature.  The carrying value of the Company’s long-term debt approximates fair value based on comparison with current prevailing market rates for loans of similar risks and maturities.

The following table provides a rollforward of the Company’s contingent consideration liability level three fair value measurements (see Note 4) during the year ended December 31, 2012:

	Significant Unobservable Inputs (Level 3)
Contingent Consideration
Balance at December 31, 2011	$	12,718
Additions:
Sprint acquisition	6,200
Saxon acquisition	1,950
Q3C acquisition	7,448
Change in fair value of contingent consideration	2,015
Reductions:
Contingent consideration payment to Rockford sellers	(6,900		)
Balance at December 31, 2012	$	23,431

The Company assesses the estimated fair value of the contractual obligation to pay the contingent consideration on a quarterly basis and any changes in estimated fair value are recorded as a non-operating charge in the Company’s statement of operations.  Fluctuations in the fair value of contingent consideration are impacted by two unobservable inputs, management’s estimate of the probability (which are greater than 75%) of the acquired company meeting the contractual operating performance target and the estimated discount rate (a rate that approximates the Company’s cost of capital). Significant increases (decreases) in either of those inputs in isolation would result in a significantly higher (lower) fair value measurement.  Generally, a change in the assumption used for the probability of meeting the performance target is accompanied by a directionally similar change in the fair value of contingent consideration liability, whereas a change in assumption used for the estimated discount rate is accompanied by a directionally opposite change in the fair value of contingent consideration liability.

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Property and Equipment (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011
Property and equipment
Gross property and equipment	$ 289,829	$ 213,240
Less: accumulated depreciation and amortization	(104,989)	(83,591)
Net property and equipment	184,840	129,649
Minimum
Property and equipment
Useful Life	3 years
Maximum
Property and equipment
Useful Life	30 years
Land and buildings
Property and equipment
Gross property and equipment	24,358	18,987
Useful Life	30 years
Leasehold improvements
Property and equipment
Gross property and equipment	17,530	5,597
Office equipment
Property and equipment
Gross property and equipment	2,092	1,203
Office equipment | Minimum
Property and equipment
Useful Life	3 years
Office equipment | Maximum
Property and equipment
Useful Life	5 years
Construction equipment
Property and equipment
Gross property and equipment	197,200	158,978
Construction equipment | Minimum
Property and equipment
Useful Life	3 years
Construction equipment | Maximum
Property and equipment
Useful Life	7 years
Transportation equipment
Property and equipment
Gross property and equipment	$ 48,649	$ 28,475
Transportation equipment | Minimum
Property and equipment
Useful Life	3 years
Transportation equipment | Maximum
Property and equipment
Useful Life	18 years

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Commitments and Contingencies (Tables)

12 Months Ended

Dec. 31, 2012

Commitments and Contingencies

Schedule of future minimum lease payments required under non-cancelable operating leases

For the Years Ending December 31,	Real Property		Real Property (Related Party)		Equipment		Total Commitments
2013	$	2,728	$	1,597	$	7,207	$	11,532
2014	2,001		1,563		6,041		9,605
2015	1,829		941		4,539		7,309
2016	1,465		775		2,418		4,658
2017	1,392		786		483		2,661
Thereafter	2,944		2,308		—		5,252
	$	12,359	$	7,970	$	20,688	$	41,017

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Stockholders' Equity

12 Months Ended

Dec. 31, 2012

Stockholders' Equity

Stockholders' Equity

Note 23—Stockholders’ Equity

Common Stock

The Company is authorized to issue 90,000,000 shares of $0.0001 par value common stock, of which 51,403,686 and 51,059,132 shares were issued and outstanding as of December 31, 2012 and 2011, respectively. As of December 31, 2012, there were 302 holders of record of our common stock.

In March 2012 and March 2011, the Company received $1,240 and $647 in exchange for 111,790 and 94,966 shares of common stock, respectively, under a purchase arrangement within the Company’s Long-Term Incentive Plan for managers and executives.

At December 31, 2012, there were 1,270,744 shares of common stock reserved for issuance upon exercise of all future stock option grants, SARS and grants of restricted shares under the 2008 Equity Plan. At December 31, 2012, there were no stock options, SARS or restricted shares of stock issued or outstanding.

As part of the quarterly compensation of the non-employee members of the Board of Directors, the Company issued shares of common stock as follows:  15,280 shares in August 2012, 12,395 shares in February 2012 and 14,825 shares in August 2011.

As part of the acquisition of Sprint, the Company issued 62,052 unregistered shares of common stock in March 2012.  Additionally, as part of the acquisition of Q3C, the Company agreed to issue shares of common stock amounting to $430 based on the average December 2012 closing price, or $14.69 per share.  The Company issued 29,273 unregistered shares of stock in February 2013.

In May 2012, the Company’s Board of Directors authorized a share repurchase program under which the Company could, from time to time and depending on market conditions, share price and other factors, acquire shares of its common stock on the open market or in privately negotiated transactions up to an aggregate purchase price of $20 million.  During the period from May 2012 through June 2012, the Company purchased and cancelled 89,600 shares of stock for $1.0 million at an average cost of $11.17 per share.  The share repurchase program expired on December 31, 2012.

Contingent shares of common stock

Former Primoris Contingent Shares

The Company achieved a specified financial milestone for 2009 per the merger agreement between Rhapsody and Former Primoris.  In March 2010 a total of 2,499,975 shares of common stock were issued.

JCG Contingent Shares

A total of 1,095,646 shares of common stock were issued to JCG’s sellers in March 2011 as a result of JCG meeting its defined performance target per the merger agreement between JCG and the Company.

Cravens Contingent Shares

A total of 74,906 shares of common stock were issued in March 2010 as a result of Cravens Services, Inc. (a small 2009 acquisition) meeting a defined performance target per the merger agreement between Cravens and the Company.

Rockford Contingent Shares

A total of 494,095 shares of common stock were issued to Rockford’s sellers in March 2011 as a result of Rockford meeting a defined performance target in 2010.  An additional 232,637 shares of common stock were issued in March 2012 as a result of Rockford meeting a defined performance target in 2011.

Preferred Stock

The Company is authorized to issue 1,000,000 shares of $0.0001 par value preferred stock.  As part of the consideration for the acquisition of JCG, the Company issued 81,852.78 shares of Preferred Stock.  On April 12, 2010, at a special meeting, the Company’s stockholders approved the conversion of the 81,852.78 shares of Preferred Stock into 8,185,278 shares of common stock.  No shares of Preferred Stock were outstanding at December 31, 2012.

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Earnings Per Share

12 Months Ended

Dec. 31, 2012

Earnings Per Share

Earnings Per Share

Note 22—Earnings Per Share

The computation of basic and diluted earnings per share for the years ended December 31, 2012, 2011 and 2010 follows:

	2012			2011		2010
Numerator:
Net income	$	58,267		$	58,559	$	33,616
Net income attributable to noncontrolling interests	(1,511		)	—		—
Net income attributable to Primoris	$	56,756		$	58,559	$	33,616
Denominator (shares in thousands):
Weighted average shares for computation of basic earnings per share	51,391			50,707		42,694
Dilutive effect of warrants and units (1)	—			51		908
Dilutive effect of contingently issuable shares (2)	—			386		989
Dilutive effect of shares issued to independent directors	11			9		—
Dilutive effect of JCG convertible preferred shares (3)	—			—		2,287
Dilutive effect of shares to be issued to Q3C sellers (4)	4			—		—
Weighted average shares for computation of diluted earnings per share	51,406			51,153		46,878
Earnings per share:
Basic	$	1.10		$	1.15	$	0.79
Diluted	$	1.10		$	1.14	$	0.72

(1) Represents the dilutive effect of common stock warrants available under the Unit Purchase Option (“UPO”).  See Note 23 — “Stockholders’ Equity”.

(2) Represents the dilutive effect of the following contingency arrangements which were met at the end of each year, but for which shares of common stock were not issued until the following year:

a) On March 25, 2010, a total of 2,499,975 shares were issued in accordance with the 2009 merger agreement between Rhapsody and Former Primoris.

b) The effect of 74,906 unregistered shares of common stock issued in March 2010 as a result of Cravens Services, Inc. (a small acquisition made in 2009) meeting a defined performance target in 2009.

c) A total of 1,095,646 unregistered shares of common stock issued to JCG’s sellers in March 2011 as a result of JCG meeting a defined performance target in 2010.

d) A total of 494,095 unregistered shares of common stock issued to Rockford’s former stockholders in March 2011 as a result of Rockford meeting a defined performance target in 2010 and an additional 232,637 unregistered shares of common stock issued in March 2012 as a result of Rockford meeting a defined performance target in 2011.

(3) Represents the dilutive effect of the conversion of preferred stock into 8,185,278 shares of common stock.  The conversion was approved at a special meeting of the stockholders held on April 12, 2010.

(4) Represents the dilutive effect of the 29,273 unregistered shares of common stock to be issued as part of the purchase consideration for the Q3C acquisition.  The shares were issued in February 2013.

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Fair Value Measurements (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Dec. 31, 2011
Assets
Short term investments	$ 3,441	$ 23,000
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1)
Assets
Cash and cash equivalents	157,551	120,306
Short term investments	3,441	23,000
Recurring | Significant Unobservable Inputs (Level 3)
Liabilities
Contingent consideration	23,431	12,718
Recurring | Amount Recorded on Balance Sheet
Assets
Cash and cash equivalents	157,551	120,306
Short term investments	$ 3,441	$ 23,000

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Reportable Operating Segments (Tables)

12 Months Ended

Dec. 31, 2012

Reportable Operating Segments

Schedule of revenue by segment

	Year Ended December 31,
	2012				2011				2010
Business Segment	Revenue		% of Segment Revenue		Revenue		% of Segment Revenue		Revenue		% of Segment Revenue
East Construction Services	$	662,248	43.0	%	$	528,745	36.2	%	$	480,533	51.0	%
West Construction Services	832,860		54.0	%	881,733		60.4	%	402,273		42.7	%
Engineering	46,626		3.0	%	49,672		3.4	%	58,959		6.3	%
Total	$	1,541,734	100.0	%	$	1,460,150	100.0	%	$	941,765	100.0	%

Schedule of gross profit by segment

	Year Ended December 31,
	2012				2011				2010
Business Segment	Gross Profit		% of Segment Revenue		Gross Profit		% of Segment Revenue		Gross Profit		% of Segment Revenue
East Construction Services	$	63,811	9.6	%	$	57,118	10.8	%	$	48,770	10.1	%
West Construction Services	119,328		14.3	%	118,385		13.4	%	61,897		15.4	%
Engineering	9,571		20.5	%	9,700		19.5	%	12,122		20.6	%
Total	$	192,710	12.5	%	$	185,203	12.7	%	$	122,789	13.0	%

Schedule of amount of goodwill recorded by segment

Segment	2012		2011
East Construction Services	$	69,859	$	59,659
West Construction Services	44,641		32,079
Engineering	2,441		2,441
Total	$	116,941	$	94,179

Schedule of revenue and total assets by geographic area

	External Revenues												Total Assets
	Year Ended December 31,												At December 31,
	2012				2011				2010				2012		2011
Country	Revenue		% of Revenue		Revenue		% of Revenue		Revenue		% of Revenue
United States	$	1,530,819	99.3	%	$	1,447,863	99.2	%	$	920,051	97.7	%	$	920,872	$	719,028
Non-United States	10,915		0.7	%	12,287		0.8	%	21,714		2.3	%	10,335		9,385
Total	$	1,541,734	100.0	%	$	1,460,150	100.0	%	$	941,765	100.0	%	$	931,207	$	728,413

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Warrants and Purchase Options For Purchase of Stock

12 Months Ended

Dec. 31, 2012

Warrants and Purchase Options For Purchase of Stock

Warrants and Purchase Options For Purchase of Stock

Note 24—Warrants and Purchase Options For Purchase of Stock

Warrants

As of December 31, 2012, there were no warrants outstanding.

At the time of the initial public offering for Rhapsody, warrants were issued to purchasers of the common stock.  Each warrant entitled the holder to purchase one share of common stock at a price of $5.00 per share and was exercisable at any time on or prior to October 2, 2010 (“Warrant”), unless earlier redeemed by the Company.  As of December 31, 2009, a total of 4,617,499 Warrants were outstanding.  From January 1, 2010 through October 1, 2010, a total of 4,337,909 Warrants were exercised resulting in cash proceeds of $21,690.

On September 7, 2010, the Company adopted a Rule 10b5-1 trading plan with a broker to facilitate the repurchase of Warrants.  From September 7, 2010 through the plan termination date of September 28, 2010, the broker completed the repurchase of 245,846 Warrants in accordance with the plan, for $277.

The remaining 33,744 Warrants expired on October 2, 2010.

Unit Purchase Options

At the time of the Rhapsody initial public offering in October 2006, the underwriter, Early Bird Capital, purchased a total of 450,000 Unit Purchase Options (“UPO”).  Each UPO provided the holder the right to purchase one share of common stock and one warrant.  The UPO expired on October 2, 2011, and the terms of the UPO allowed for a cashless conversion of one share of common stock for $8.80 per share. On June 29, 2011, the underwriter exercised all of their 450,000 UPO on a cashless basis. Using the previous day’s closing price of $13.31 per share, the exercise would have resulted in the issuance of 152,480 shares of common stock. In lieu of issuing these shares, the parties negotiated a cash payment of approximately $2.0 million, which was made on June 30, 2011 and recorded as a reduction of additional paid-in capital on the balance sheet.

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Selected Quarterly Financial Information (Unaudited)

12 Months Ended

Dec. 31, 2012

Selected Quarterly Financial Information (Unaudited)

Selected Quarterly Financial Information (Unaudited)

Note 25—Selected Quarterly Financial Information (Unaudited)

Selected unaudited quarterly consolidated financial information is presented in the following tables:

	Year Ended December 31, 2012
(In thousands, except per share data)	1st Quarter		2nd Quarter		3rd Quarter		4th Quarter
Revenues	$	291,573	$	337,436	$	431,842	$	480,883
Gross profit	37,596		44,004		56,291		54,819
Net income	10,530		11,857		17,948		17,932
Net income attributable to Primoris	10,486		11,733		17,516		17,021
Earnings per share:
Basic earnings per share	$	0.21	$	0.23	$	0.34	$	0.33
Diluted earnings per share	$	0.20	$	0.23	$	0.34	$	0.33
Weighted average shares outstanding
Basic	51,096		51,435		51,398		51,404
Diluted	51,337		51,435		51,404		51,418

	Year Ended December 31, 2011
(In thousands, except per share data)	1st Quarter		2nd Quarter		3rd Quarter		4th Quarter
Revenues	$	359,645	$	351,956	$	375,483	$	373,066
Gross profit	40,630		41,406		52,121		51,046
Net income	12,278		14,462		19,348		12,471
Earnings per share:
Basic earnings per share	$	0.25	$	0.28	$	0.38	$	0.24
Diluted earnings per share	$	0.24	$	0.28	$	0.38	$	0.24
Weighted average shares outstanding
Basic	49,675		51,044		51,054		51,059
Diluted	51,051		51,154		51,054		51,292

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Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2012

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

Note 2—Summary of Significant Accounting Policies

Basis of presentation—The accompanying consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and the financial statement rules and regulations of the Securities and Exchange Commission (“SEC”).  References for Financial Accounting Standards Board (“FASB”) standards are made to the FASB Accounting Standards Codification (“ASC”).

Reclassifications have been made to prior year financial statement presentation to conform to the current year presentation.

Principles of consolidation—The accompanying Consolidated Financial Statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

Use of estimates—The preparation of the Company’s Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could materially differ from those estimates. Significant estimates are made for costs to complete construction projects which have a direct effect on gross profit as reported in these consolidated financial statements.

Operating cycle— In the accompanying consolidated balance sheets, assets and liabilities relating to long-term construction contracts are included as current assets and current liabilities, since they are expected to be realized or liquidated in the normal course of contract completion, although completion may require more than one calendar year.

Cash and cash equivalents—The Company considers all highly liquid investments with an original maturity of three months or less when purchased as cash equivalents.

Short term investments—The Company classifies as short term investments all securities or other assets acquired which have ready marketability and can be liquidated, if necessary, within the current operating cycle and which have readily determinable fair values. Short term investments are classified as available for sale and are recorded at fair value using the specific identification method. Currently, the majority of the Company’s short-term investments are in short-term dollar-denominated bank deposits and other four to six month certificates of deposits (“CDs”) through the CDARS (Certificate of Deposit Account Registry Service) process and Treasury Bills in order to provide FDIC backing of the investments.

Customer retention deposits—Customer retention deposits consist of contract retention payments made by customers into escrow cash accounts with a bank. Investments for these amounts are limited to highly graded U.S. and municipal government debt obligations, investment grade commercial paper and CDs, which limits credit risk on these balances. Escrow cash accounts are released to the Company by customers as projects are completed in accordance with contract terms.

Inventory and uninstalled contract materials—Inventory consists of expendable construction materials and small tools that will be used in construction projects and is valued at the lower of cost, using first-in, first-out method, or market.  Uninstalled contract materials include certain job specific materials not yet installed which are valued using the specific identification method.

Business combinations—Business combinations are accounted for using the acquisition method of accounting. Expenses incurred in connection with a business combination are expensed as incurred.  Changes in deferred tax asset valuation allowances and acquired tax uncertainties after the measurement period are recognized in net income.

Goodwill and other intangible assets—The Company accounts for goodwill and other indefinite-lived intangible assets in accordance with ASC Topic 350 “Intangibles — Goodwill and Other”.  Under ASC Topic 350, goodwill and certain indefinite-lived intangible assets are not amortized but are subject to an annual impairment test as of the first day of the fourth quarter of each year, with more frequent testing if indicators of potential impairment exist.  The impairment review is performed at the reporting unit level for those units with recorded goodwill.  During the fourth quarter of 2010, the Company determined that the recorded value of the Cravens acquisition intangible assets and goodwill was impaired and recorded an impairment charge of $1,700.  There were no other impairments of goodwill or intangible assets during the periods presented.

At December 31, 2012, goodwill is recorded at our reporting units as follows:

· James Construction Group, East Construction Services segment, $59,259;

· Rockford, West Construction Services segment, $32,079;

· Q3C Contracting, Inc., West Construction Services segment, $12,562;

· Sprint (a subsidiary of PES), East Construction Services segment, $9,389;

· Born Canada, Engineering segment, $2,441;

· The Saxon Group (a subsidiary of PES), East Construction Services segment, $810; and

· Cardinal Contractors, East Construction Services segment, $401.

In September 2011, the FASB issued ASU 2011-08, Intangibles — Goodwill and Other (Topic 350): Testing Goodwill or Impairment (“ASU 2011-08”). ASU 2011-08 provides an option to assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If an entity determines that the fair value is not less than its carrying amount, then it is not necessary to perform the two-step impairment test.  An entity can choose to perform the qualitative assessment on none, some or all of its reporting units.  An entity can also bypass the qualitative assessment for any reporting unit in any period and proceed directly to step one of the impairment test, and then resume performing the qualitative assessment in any subsequent period.  ASU 2011-08 also includes new qualitative indicators that replace those currently used to determine whether an interim goodwill impairment test is required to be performed. On January 1, 2012, the Company adopted this standard which did not have a material impact on the Company’s financial position, results of operations or cash flows.

In July 2012, the FASB issued ASU 2012-02, Intangibles — Goodwill and Other (Topic 350):  Testing Indefinite-Lived Intangible Assets for Impairment (“ASU 2012-02”).  ASU 2012-02 allows an organization the option of first assessing qualitative factors to determine if a quantitative impairment test of the indefinite-lived intangible asset is necessary.  If the qualitative assessment reveals that it is “more likely than not” that the asset is impaired, a calculation of the asset’s fair value is required.  Otherwise, no quantitative calculation, as outlined in Subtopic 350-30 is necessary.  The Company adopted this standard on October 1, 2012, the date of the Company’s impairment review.  The adoption of ASU 2012-02 did not have a material impact on the Company’s financial position, results of operations or cash flows.

Income tax— Current income tax expense is the amount of income taxes expected to be payable for the current year. A deferred income tax liability or asset is established for the expected future tax consequences resulting from the differences in financial reporting and tax basis of assets and liabilities between GAAP and the tax codes. A valuation allowance is provided if it is more likely than not that some or all of the deferred tax assets will not be realized. In addition to valuation allowances, the Company provides for uncertain tax positions when such tax positions do not meet the recognition thresholds or measurement standards as set forth in ASC Topic 740 regarding accounting for uncertainty in income taxes. Amounts for uncertain tax positions are adjusted in periods when new information becomes available or when positions are effectively settled. The Company recognizes accrued interest and penalties related to uncertain tax positions, if any, as a component of income tax expense.

Comprehensive income—The Company accounts for comprehensive income in accordance with ASC Topic 220 “Comprehensive Income”, which specifies the computation, presentation and disclosure requirements for comprehensive income (loss). During the reported periods herein, such amounts were not significant.

General matters—The Company has significant working capital invested in assets that may have a liquidation period extending beyond one year. The Company has claims receivable and retention due from various customers and others that are currently in dispute, the realization of which is subject to binding arbitration, final negotiation or litigation. Although management believes that it will be successful in collecting these amounts, the amounts ultimately collected upon final resolution of these matters may materially differ from the carrying value currently presented in the accompanying consolidated balance sheet.

Foreign operations—At December 31, 2012, the Company had operations in Canada with assets aggregating approximately $10,335, compared to $9,385 at December 31, 2011.

Functional currencies and foreign currency translation—Through a subsidiary, the Company maintains foreign operations in Canada.  The Company uses the United States dollar as its functional currency in Canada, as substantially all monetary transactions are made in dollars, and other significant economic facts and circumstances currently support that position. As these factors may change, the Company periodically assesses its position with respect to the functional currency of its foreign subsidiary.  Included in other income are foreign exchange losses of $36 in 2012, losses of $96 in 2011 and gains of $250 in 2010.

Partnerships and joint ventures — As is normal in the construction industry, the Company is periodically a member of a partnership or a joint venture.  These partnerships or joint ventures are used primarily for the execution of single contracts or projects.  The Company’s ownership can vary from a small noncontrolling ownership to a significant ownership interest.  The Company evaluates each partnership or joint venture to determine whether the entity is considered a variable interest entity (“VIE”) as defined in FASB ASC Topic 810, and if a VIE, whether the Company is the primary beneficiary of the VIE, which would require the Company to consolidate the VIE with the Company’s financial statements.  When consolidation occurs, the Company accounts for the interests of the other parties as a noncontrolling interest and discloses the net income attributable to noncontrolling interests.

At December 31, 2012, the Company consolidated the financial results of one VIE, Blythe Power Constructors (“Blythe”), a joint venture formed for the installation of a parabolic trough solar field and steam generation system in California.  For Blythe, net income attributable to the Company and the net income attributable to the noncontrolling interest owners are presented on the Consolidated Statement of Earnings.  Other financial information is presented in Note 13 - Noncontrolling Interests.

Equity method accounting— If the Company is not the primary beneficiary of a VIE or does not have a controlling interest, the Company accounts for its noncontrolling interest using the equity method of accounting per ASC Topic 323.  Such entity is recorded at cost and the carrying amount is adjusted periodically to recognize the Company’s proportionate share of income or loss, additional contributions made and dividends and capital distributions received.  The Company also recognizes its share of any impairment charge recorded by the investee.  The Company will consider the effect of an other than temporary decrease in the value of the investment if there is a basis difference in the assets of the investee.

In the event a partially owned equity affiliate were to incur a loss and the Company’s cumulative proportionate share of the loss exceeded the carrying amount of the equity method investment, application of the equity method would be suspended and the Company’s proportionate share of further losses would not be recognized unless the Company committed to provide further financial support to the affiliate. The Company would resume application of the equity method once the affiliate became profitable and the Company’s proportionate share of the affiliate’s earnings equals the Company’s cumulative proportionate share of losses that were not recognized during the period the application of the equity method was suspended.

In December 2011, the Company recognized its proportionate share of an impairment charge taken by the WesPac Energy LLC equity investment and recorded a basis adjustment in the investment.  See Note 8 — “Equity Method Investments”.

Cash concentration—The Company places its cash in short term U.S. Treasury bonds, in CDs and with several other financial institutions. As of December 31, 2012 and 2011, the Company had cash balances of $157.6 million and $120.3 million, respectively.  At December 31, 2012, the $157.6 million consisted of $4.6 million held in Treasury bill funds and $153.0 million with various financial institutions that are backed by the federal government FDIC program.  At December 31, 2011, the $120.3 million of cash consisted of $28.0 million held in short-term CDARS, $4.6 million in Treasury bill funds and $87.7 million was held with various financial institutions that are backed by the federal government FDIC program.

Collective bargaining agreements—Approximately 37% of the Company’s hourly employees, primarily consisting of field laborers, were covered by collective bargaining agreements. Upon renegotiation of such agreements, the Company could be exposed to increases in hourly costs and work stoppages. Of the 72 collective bargaining agreements to which the Company is a party to, nineteen will require renegotiation during 2013.

Multiemployer plans —The Company participates and contributes to a number of multiemployer benefit plans for its union employees at rates determined by the various collective bargaining agreements.  Each plan’s trustees determine the eligibility and allocations of contributions and benefit amounts, determine the types of benefits and administer the plan.  If the Company were to withdraw from a plan, the multiemployer benefit plan requires satisfaction of a withdrawal obligation.  Any potential withdrawal obligation may be material.  Any withdrawal liability would be recorded when it is probable that a liability exists and can be reasonably estimated, in accordance with GAAP.

In November 2011, the Company withdrew from the Central States Southeast and Southwest Areas Pension Fund multiemployer pension plan and recorded a $5 million withdrawal liability as of December 31, 2011.  In 2012, the Company increased the estimated withdrawal liability balance to $7.5 million, recording an expense of $2.5 million.  At this time, the Company has no plans to withdraw from any other agreements.  See Note 17 — Multiemployer Plans

Worker’s compensation insurance—The Company self-insures worker’s compensation claims to a certain level. The Company maintained a self-insurance reserve totaling $16,547 and $13,809 at December 31, 2012 and 2011, respectively. The amount is included in “accrued expenses and other current liabilities” on the accompanying consolidated balance sheets. Claims administration expenses are charged to current operations as incurred. Future actual payments may materially differ from these reserves.

Fair value of financial instruments—The consolidated financial statements include financial instruments for which the fair value may differ from amounts reflected on a historical basis. Financial instruments of the Company consist of cash, accounts receivable, short-term investments, accounts payable and certain accrued liabilities.  These financial instruments generally approximate fair market value based on the short-term nature of these instruments.  The carrying value of the Company’s long-term debt approximates fair value based on comparison with current prevailing market rates for loans of similar risks and maturities.

In May 2011, the FASB issued ASU No. 2011-04, Fair Value Measurement: Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS, which provides amendments to FASB ASC Topic 820, Fair Value Measurement. The objective of ASU 2011-04 is to create common fair value measurement and disclosure requirements between GAAP and International Financial Reporting Standards (“IFRS”). The amendments clarify existing fair value measurement and disclosure requirements and make changes to particular principles or requirements for measuring or disclosing information about fair value measurements.  On January 1, 2012, the Company adopted ASU 2011-04 which did not have a material impact on its consolidated financial statements.

Accounts receivable—Contract receivables are primarily concentrated from public and private companies and governmental agencies located throughout the United States and Canada. Credit terms for payment of products and services are extended to customers in the normal course of business and no interest is charged. Contract receivables are generally progress billings on projects, and as a result, are short term in nature.  The Company requires no collateral from its customers, but follows the practice of filing statutory liens or stop notices on all construction projects when collection problems are anticipated. The Company uses the allowance method of accounting for losses from uncollectible accounts. Under this method an allowance is provided based upon historical experience and management’s evaluation of outstanding contract receivables at the end of each year. Receivables are written off in the period deemed uncollectible. The allowance for doubtful accounts at December 31, 2012 and 2011 was $432 and $363, respectively.

Revenue recognition—Historically, substantial portions of the Company’s revenues have been generated under fixed-price contracts. Fixed-price contracts carry certain inherent risks, including underestimation of costs, problems with new technologies and economic and other changes that may occur over the contract period. The Company recognizes revenues using the percentage-of-completion method for fixed-price contracts, which may result in uneven and irregular results. Unforeseen events and circumstances can alter the estimate of the costs and potential profit associated with a particular contract.  Total estimated costs, and thus contract revenues and income, can be impacted by changes in any of the following:  productivity, scheduling, the unit cost of labor, subcontracts, materials and equipment. Additionally, external factors such as weather, client needs, client delays in providing permits and approvals, labor availability, governmental regulation and politics may affect the progress of a project’s completion and thus the timing of revenue recognition.  To the extent that original cost estimates are modified, estimated costs to complete increase, delivery schedules are delayed, or progress under a contract is otherwise impeded, cash flow, revenue recognition and profitability from a particular contract may be adversely affected.

In the percentage-of-completion method, estimated revenues and resulting contract income is calculated based on the total costs incurred to date as a percentage of total estimated costs. If an estimate of total contract cost indicates a loss on a contract, the projected loss is recognized in full at the time of the estimate.  The full loss amount is recognized as an “accrued loss provision” on the balance sheet.  As the percentage-of-completion method is used to calculate revenues, the accrued loss provision is changed so that the gross profit for the contract is zero.

Other contract forms—In addition, the Company also uses unit-price, time and material, and cost reimbursable plus fee contracts.  For these jobs, revenue is recognized based on contractual terms.  For example, time and material contract revenues are recognized based on purchasing and employee time records.  Similarly, unit price contracts recognize revenue based on accomplishment of specific units at a specified unit price.

For all of its contracts, the Company includes the provision for estimated losses on uncompleted contracts in accrued expenses. The provision for estimated losses on uncompleted contracts was $764 and $917 for the years ended December 31, 2012 and 2011, respectively. Changes in job performance, job conditions and estimated profitability, including those arising from final contract settlements, may result in revisions to costs and income. These revisions are recognized in the period in which the revisions are determined. Claims are included in revenues when realization is probable and amounts can be reliably determined. Revenues in excess of contract costs incurred on claims are recognized only when the amounts have been paid.

The caption “Costs and estimated earnings in excess of billings” represents unbilled receivables which arise when revenues have been recorded but the amount cannot be billed under the terms of the contract until a later date.  Balances may represent:  (a) unbilled amounts arising from the use of the percentage-of-completion method of accounting, (b) incurred costs to be billed under cost reimbursement type contracts, or (c) amounts arising from routine lags in billing.  For those contracts in which billings exceed contract revenues recognized to date, excesses are included in the caption “Billings in excess of costs and estimated earnings”.

The Company considers unapproved change orders to be contract variations for which Primoris has customer approval for a scope change but a price change associated with the scope change has not yet been agreed upon.  Costs associated with unapproved change orders are included in the estimated cost to complete the contracts and are treated as project costs as incurred. The Company recognizes revenue equal to costs incurred on unapproved change orders when realization of price approval is probable and the estimated revenue amount is equal to or greater than the costs related to the unapproved change order. Unapproved change orders involve the use of estimates, and it is reasonably possible that revisions to the estimated costs and recoverable amounts may be required in future reporting periods to reflect changes in estimates or final agreements with customers.

The Company considers claims to be amounts Primoris seeks, or will seek, to collect from customers or others for customer-caused changes in contract specifications or design, or other customer-related causes of unanticipated additional contract costs on which there is no agreement with customers on both scope and price changes. Revenue from claims is recognized when agreement is reached with customers as to the value of the claims, which in some instances may not occur until after completion of work under the contract. Costs associated with claims are included in the estimated costs to complete the contracts and are treated as project costs when incurred.

In accordance with applicable terms of construction contracts, certain retainage amounts may be withheld by customers until completion and acceptance of the project.  Final payments of the majority of retainage may not be made until the following operating cycle.

Significant revisions in contract estimates—As previously discussed, revenue recognition is based on the percentage-of-completion method for firm fixed-price contracts. Under this method, the costs incurred to date as a percentage of total estimated costs are used to calculate the revenue to be recognized. Total estimated costs, and thus contract income, are impacted by many factors.

For projects that are in process in the prior year, but are either completed or continue to be in process during the current year, there can be a difference in revenues and profits related to the prior year, had current year estimates of costs to complete been known in the prior year.

During the year ended December 31, 2012, certain contracts had revisions in estimates from those projected in 2011.  If the revised estimates as of December 31, 2012 had been applied in the prior year, the gross profit earned on these contracts would have resulted in an increase of approximately $8,185 in gross profit in 2011, or approximately $0.10 per diluted share.   Similarly, the revised estimates as of December 31, 2011 had been applied in the prior year; the gross profit earned on these contracts would have resulted in an increase of approximately $10,244 in 2010, or approximately $0.12 per diluted share.  In addition, the revised estimates for the year ended December 31, 2010 would have resulted in a gross profit increase of approximately $9,892 in the year 2009, or approximately $0.13 per diluted share.

Customer concentration — The Company operates in multiple industry segments encompassing the construction of commercial, industrial and public works infrastructure assets throughout primarily the United States. Typically, the top ten customers in any one calendar year generate revenues in excess of 50% of total revenues; however in most years a different group make up the top ten customers.

For the years ended December 31, 2012 and 2011, revenues generated by the top ten customers were $862.3 million and $1,000 million, respectively, which represented 55.9% and 68.5%, respectively, of total revenues during the periods.

During the years ending December 31, 2012 and 2011, the Louisiana DOT represented 11.1% and 16.4%, respectively, of total revenues and a large gas and electric utility represented 14.6% and 11.3%, respectively, of total revenues. During the year ending December 31, 2012 and 2011, revenues generated by Rockford under the Ruby contract were $12.6 million and $274.9 million, respectively, which represented 0.8% and 18.8%, respectively, of total revenues during the periods.  The Ruby contract was part of a large project for the construction of a natural gas pipeline from Wyoming to Oregon for which field work was substantially completed in 2011.

At December 31, 2012, approximately 10.0% of the Company’s accounts receivable were due from one customer, and that customer provided 14.6% of the Company’s revenues during 2012.  At December 31, 2011, approximately 15.5% of the Company’s accounts receivable were due from one customer, and that customer provided 11.3% of the Company’s revenues during 2011.

Property and equipment—Property and equipment are recorded at cost and are depreciated using the straight-line method over the estimated useful lives of the related assets, usually ranging from three to thirty years. Maintenance and repairs are charged to expense as incurred. Significant renewals and betterments are capitalized. At the time of retirement or other disposition of property and equipment, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is reflected in operations.

The Company assesses the recoverability of property and equipment by determining whether the depreciation of property and equipment over its remaining life can be recovered through projected undiscounted future cash flows. The amount of property and equipment impairment if any, is measured based on fair value and is charged to operations in the period in which property and equipment impairment is determined by management. As of December 31, 2012 and 2011, the Company’s management has not identified any material impairment of its property and equipment.

Taxes collected from customers—Taxes collected from the Company’s customers are recorded on a net basis.

Share-based payments and stock-based compensation—In July 2008, the shareholders approved and the Company adopted the Primoris Services Corporation 2008 Long-term Incentive Equity Plan (“2008 Equity Plan”).   Under the terms of the 2008 Equity Plan, the Company issued 111,790 shares of stock in 2012 and 94,966 shares of stock in 2011, purchased by our employees who are participants in the Primoris Long-term Retention Plan.  The shares have a six-month restriction on any trades.  As part of the quarterly compensation of the non-employee members of the Board of Directors, the Company issued 27,675 shares of common stock during 2012 and 14,825 shares of common stock during 2011 under the 2008 Equity Plan.  The shares were fully vested and have a one-year restriction on any trades.  As of December 31, 2012, there were 1,270,744 shares of common stock reserved to provide for the grant and exercise of all future stock option issuances, stock appreciation rights (“SARS”) and grants of restricted shares under the 2008 Equity Plan.

Under guidance of ASC Topic 718 “Compensation — Stock Compensation”, stock-based compensation cost is measured at the date of grant, based on the calculated fair value of the stock-based award, and is recognized as expense over the employee’s requisite service period (generally the vesting period of the award).

Contingent Earnout Liabilities—As part of recent acquisitions, the Company has agreed to issue additional shares of common stock, or makes payments of cash, to the sellers upon meeting certain operating performance targets for certain periods subsequent to the acquisition date.  Each period, the Company evaluates the fair value of the estimated contingency and records a non-operating charge for the change in the fair value.  Upon meeting the target, the Company reflects the full liability on the balance sheet and records as a charge to selling, general and administration expense for the change in the fair value of the liability from the prior period.  The liability will be settled by issuing the agreed upon values of stock or amount of cash to be paid, as determined by the purchase agreement.

In March 2011, the Company issued 1,095,646 shares of common stock to the sellers of JCG after achieving a specific operating performance target for 2010.

The Rockford 2011 earnout target was achieved in 2011 and the Company reflected the liability on the balance sheet at December 31, 2011.  The liability was settled by issuing 232,637 shares of common stock to the sellers and making a cash payment of $3.45 million in April 2012.  The Rockford 2012 earnout target was achieved in 2012 and the Company reflected the liability on the balance sheet at December 31, 2012.  The liability will be settled by making a cash payment of $6.9 million in March 2013.

As part of the Sprint acquisition in March 2012, the Company agreed to issue additional cash to the sellers upon meeting certain operating performance targets for 2012 and 2013.  The Sprint 2012 earnout target was achieved in 2012 and a $4.0 million liability was recorded on the balance sheet at December 31, 2012.  The liability will be settled by making a cash payment in March 2013.

Derivative instruments and hedging activities—From time to time, the Company utilizes foreign currency hedge agreements to manage its Canadian currency exchange exposures, which are accounted for in accordance with ASC Topic 815 “Derivatives and Hedging”.  During the twelve months ended December 31, 2012 and 2011, the Company had no derivative financial instruments.

Recently Issued Accounting Pronouncements

Fair Value Disclosures

In May 2011, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2011-04, Fair Value Measurement: Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS, which provides amendments to FASB ASC Topic 820, Fair Value Measurement. The objective of ASU 2011-04 is to create common fair value measurement and disclosure requirements between GAAP and International Financial Reporting Standards (“IFRS”). The amendments clarify existing fair value measurement and disclosure requirements and make changes to particular principles or requirements for measuring or disclosing information about fair value measurements.  On January 1, 2012, the Company adopted ASU 2011-04, which did not have a material impact on its consolidated financial statements.

Goodwill Impairment Testing

In September 2011, the FASB issued ASU 2011-08, Intangibles — Goodwill and Other (Topic 350): Testing Goodwill or Impairment (“ASU 2011-08”).  ASU 2011-08 provides an option to assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If an entity determines that the fair value is not less than its carrying amount, then it is not necessary to perform the two-step impairment test.  An entity can choose to perform the qualitative assessment on none, some or all of its reporting units.  An entity can also bypass the qualitative assessment for any reporting unit in any period and proceed directly to step one of the impairment test, and then resume performing the qualitative assessment in any subsequent period.  ASU 2011-08 also includes new qualitative indicators that replace those currently used to determine whether an interim goodwill impairment test is required to be performed. On January 1, 2012, the Company adopted this standard which did not have a material impact on the Company’s financial position, results of operations or cash flows.

Intangible Asset Impairment Testing

In July 2012, the FASB issued ASU 2012-02, Intangibles — Goodwill and Other (Topic 350):  Testing Indefinite-Lived Intangible Assets for Impairment (“ASU 2012-02”).  ASU 2012-02 allows an organization the option of first assessing qualitative factors to determine if a quantitative impairment test of the indefinite-lived intangible asset is necessary.  If the qualitative assessment reveals that it is “more likely than not” that the asset is impaired, a calculation of the asset’s fair value is required.  Otherwise, no quantitative calculation, as outlined in Subtopic 350-30 is necessary.  ASU 2012-02 is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012.  The Company adopted this standard on October 1, 2012, the date of the Company’s annual impairment review.  The adoption of ASU 2012-02 did not have a material impact on the Company’s financial position, results of operations or cash flows.

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Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2012

Summary of Significant Accounting Policies

Basis of presentation

Basis of presentation—The accompanying consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and the financial statement rules and regulations of the Securities and Exchange Commission (“SEC”).  References for Financial Accounting Standards Board (“FASB”) standards are made to the FASB Accounting Standards Codification (“ASC”).

Reclassifications have been made to prior year financial statement presentation to conform to the current year presentation.

Principles of consolidation

Principles of consolidation—The accompanying Consolidated Financial Statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

Use of estimates

Use of estimates—The preparation of the Company’s Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could materially differ from those estimates. Significant estimates are made for costs to complete construction projects which have a direct effect on gross profit as reported in these consolidated financial statements.

Operating cycle

Operating cycle— In the accompanying consolidated balance sheets, assets and liabilities relating to long-term construction contracts are included as current assets and current liabilities, since they are expected to be realized or liquidated in the normal course of contract completion, although completion may require more than one calendar year.

Cash and cash equivalents

Cash and cash equivalents—The Company considers all highly liquid investments with an original maturity of three months or less when purchased as cash equivalents.

Short term investments

Short term investments—The Company classifies as short term investments all securities or other assets acquired which have ready marketability and can be liquidated, if necessary, within the current operating cycle and which have readily determinable fair values. Short term investments are classified as available for sale and are recorded at fair value using the specific identification method. Currently, the majority of the Company’s short-term investments are in short-term dollar-denominated bank deposits and other four to six month certificates of deposits (“CDs”) through the CDARS (Certificate of Deposit Account Registry Service) process and Treasury Bills in order to provide FDIC backing of the investments.

Customer retention deposits

Customer retention deposits—Customer retention deposits consist of contract retention payments made by customers into escrow cash accounts with a bank. Investments for these amounts are limited to highly graded U.S. and municipal government debt obligations, investment grade commercial paper and CDs, which limits credit risk on these balances. Escrow cash accounts are released to the Company by customers as projects are completed in accordance with contract terms.

Inventory and uninstalled contract materials

Inventory and uninstalled contract materials—Inventory consists of expendable construction materials and small tools that will be used in construction projects and is valued at the lower of cost, using first-in, first-out method, or market.  Uninstalled contract materials include certain job specific materials not yet installed which are valued using the specific identification method.

Business combinations

Business combinations—Business combinations are accounted for using the acquisition method of accounting. Expenses incurred in connection with a business combination are expensed as incurred.  Changes in deferred tax asset valuation allowances and acquired tax uncertainties after the measurement period are recognized in net income.

Goodwill and other intangible assets

Goodwill and other intangible assets—The Company accounts for goodwill and other indefinite-lived intangible assets in accordance with ASC Topic 350 “Intangibles — Goodwill and Other”.  Under ASC Topic 350, goodwill and certain indefinite-lived intangible assets are not amortized but are subject to an annual impairment test as of the first day of the fourth quarter of each year, with more frequent testing if indicators of potential impairment exist.  The impairment review is performed at the reporting unit level for those units with recorded goodwill.  During the fourth quarter of 2010, the Company determined that the recorded value of the Cravens acquisition intangible assets and goodwill was impaired and recorded an impairment charge of $1,700.  There were no other impairments of goodwill or intangible assets during the periods presented.

At December 31, 2012, goodwill is recorded at our reporting units as follows:

· James Construction Group, East Construction Services segment, $59,259;

· Rockford, West Construction Services segment, $32,079;

· Q3C Contracting, Inc., West Construction Services segment, $13,287;

· Sprint (a subsidiary of PES), East Construction Services segment, $9,389;

· Born Canada, Engineering segment, $2,441;

· The Saxon Group (a subsidiary of PES), East Construction Services segment, $810; and

· Cardinal Contractors, East Construction Services segment, $401.

In September 2011, the FASB issued ASU 2011-08, Intangibles — Goodwill and Other (Topic 350): Testing Goodwill or Impairment (“ASU 2011-08”). ASU 2011-08 provides an option to assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If an entity determines that the fair value is not less than its carrying amount, then it is not necessary to perform the two-step impairment test.  An entity can choose to perform the qualitative assessment on none, some or all of its reporting units.  An entity can also bypass the qualitative assessment for any reporting unit in any period and proceed directly to step one of the impairment test, and then resume performing the qualitative assessment in any subsequent period.  ASU 2011-08 also includes new qualitative indicators that replace those currently used to determine whether an interim goodwill impairment test is required to be performed. On January 1, 2012, the Company adopted this standard which did not have a material impact on the Company’s financial position, results of operations or cash flows.

In July 2012, the FASB issued ASU 2012-02, Intangibles — Goodwill and Other (Topic 350):  Testing Indefinite-Lived Intangible Assets for Impairment (“ASU 2012-02”).  ASU 2012-02 allows an organization the option of first assessing qualitative factors to determine if a quantitative impairment test of the indefinite-lived intangible asset is necessary.  If the qualitative assessment reveals that it is “more likely than not” that the asset is impaired, a calculation of the asset’s fair value is required.  Otherwise, no quantitative calculation, as outlined in Subtopic 350-30 is necessary.  The Company adopted this standard on October 1, 2012, the date of the Company’s impairment review.  The adoption of ASU 2012-02 did not have a material impact on the Company’s financial position, results of operations or cash flows.

Income tax

Income tax— Current income tax expense is the amount of income taxes expected to be payable for the current year. A deferred income tax liability or asset is established for the expected future tax consequences resulting from the differences in financial reporting and tax basis of assets and liabilities between GAAP and the tax codes. A valuation allowance is provided if it is more likely than not that some or all of the deferred tax assets will not be realized. In addition to valuation allowances, the Company provides for uncertain tax positions when such tax positions do not meet the recognition thresholds or measurement standards as set forth in ASC Topic 740 regarding accounting for uncertainty in income taxes. Amounts for uncertain tax positions are adjusted in periods when new information becomes available or when positions are effectively settled. The Company recognizes accrued interest and penalties related to uncertain tax positions, if any, as a component of income tax expense.

Comprehensive income

Comprehensive income—The Company accounts for comprehensive income in accordance with ASC Topic 220 “Comprehensive Income”, which specifies the computation, presentation and disclosure requirements for comprehensive income (loss). During the reported periods herein, such amounts were not significant.

General matters

General matters—The Company has significant working capital invested in assets that may have a liquidation period extending beyond one year. The Company has claims receivable and retention due from various customers and others that are currently in dispute, the realization of which is subject to binding arbitration, final negotiation or litigation. Although management believes that it will be successful in collecting these amounts, the amounts ultimately collected upon final resolution of these matters may materially differ from the carrying value currently presented in the accompanying consolidated balance sheet.

Foreign operations

Foreign operations—At December 31, 2012, the Company had operations in Canada with assets aggregating approximately $10,335, compared to $9,385 at December 31, 2011.

Functional currencies and foreign currency translation

Functional currencies and foreign currency translation—Through a subsidiary, the Company maintains foreign operations in Canada.  The Company uses the United States dollar as its functional currency in Canada, as substantially all monetary transactions are made in dollars, and other significant economic facts and circumstances currently support that position. As these factors may change, the Company periodically assesses its position with respect to the functional currency of its foreign subsidiary.  Included in other income are foreign exchange losses of $36 in 2012, losses of $96 in 2011 and gains of $250 in 2010.

Partnerships and joint ventures

Partnerships and joint ventures — As is normal in the construction industry, the Company is periodically a member of a partnership or a joint venture.  These partnerships or joint ventures are used primarily for the execution of single contracts or projects.  The Company’s ownership can vary from a small noncontrolling ownership to a significant ownership interest.  The Company evaluates each partnership or joint venture to determine whether the entity is considered a variable interest entity (“VIE”) as defined in FASB ASC Topic 810, and if a VIE, whether the Company is the primary beneficiary of the VIE, which would require the Company to consolidate the VIE with the Company’s financial statements.  When consolidation occurs, the Company accounts for the interests of the other parties as a noncontrolling interest and discloses the net income attributable to noncontrolling interests.

At December 31, 2012, the Company consolidated the financial results of one VIE, Blythe Power Constructors (“Blythe”), a joint venture formed for the installation of a parabolic trough solar field and steam generation system in California.  For Blythe, net income attributable to the Company and the net income attributable to the noncontrolling interest owners are presented on the Consolidated Statement of Earnings.  Other financial information is presented in Note 13 - Noncontrolling Interests.

Equity method accounting

Equity method accounting— If the Company is not the primary beneficiary of a VIE or does not have a controlling interest, the Company accounts for its noncontrolling interest using the equity method of accounting per ASC Topic 323.  Such entity is recorded at cost and the carrying amount is adjusted periodically to recognize the Company’s proportionate share of income or loss, additional contributions made and dividends and capital distributions received.  The Company also recognizes its share of any impairment charge recorded by the investee.  The Company will consider the effect of an other than temporary decrease in the value of the investment if there is a basis difference in the assets of the investee.

In the event a partially owned equity affiliate were to incur a loss and the Company’s cumulative proportionate share of the loss exceeded the carrying amount of the equity method investment, application of the equity method would be suspended and the Company’s proportionate share of further losses would not be recognized unless the Company committed to provide further financial support to the affiliate. The Company would resume application of the equity method once the affiliate became profitable and the Company’s proportionate share of the affiliate’s earnings equals the Company’s cumulative proportionate share of losses that were not recognized during the period the application of the equity method was suspended.

In December 2011, the Company recognized its proportionate share of an impairment charge taken by the WesPac Energy LLC equity investment and recorded a basis adjustment in the investment.  See Note 8 — “Equity Method Investments”.

Cash concentration

Cash concentration—The Company places its cash in short term U.S. Treasury bonds, in CDs and with several other financial institutions. As of December 31, 2012 and 2011, the Company had cash balances of $157.6 million and $120.3 million, respectively.  At December 31, 2012, the $157.6 million consisted of $4.6 million held in Treasury bill funds and $153.0 million with various financial institutions that are backed by the federal government FDIC program.  At December 31, 2011, the $120.3 million of cash consisted of $28.0 million held in short-term CDARS, $4.6 million in Treasury bill funds and $87.7 million was held with various financial institutions that are backed by the federal government FDIC program.

Collective bargaining agreements

Collective bargaining agreements—Approximately 37% of the Company’s hourly employees, primarily consisting of field laborers, were covered by collective bargaining agreements. Upon renegotiation of such agreements, the Company could be exposed to increases in hourly costs and work stoppages. Of the 72 collective bargaining agreements to which the Company is a party to, nineteen will require renegotiation during 2013.

Multiemployer plans

Multiemployer plans —The Company participates and contributes to a number of multiemployer benefit plans for its union employees at rates determined by the various collective bargaining agreements.  Each plan’s trustees determine the eligibility and allocations of contributions and benefit amounts, determine the types of benefits and administer the plan.  If the Company were to withdraw from a plan, the multiemployer benefit plan requires satisfaction of a withdrawal obligation.  Any potential withdrawal obligation may be material.  Any withdrawal liability would be recorded when it is probable that a liability exists and can be reasonably estimated, in accordance with GAAP.

In November 2011, the Company withdrew from the Central States Southeast and Southwest Areas Pension Fund multiemployer pension plan and recorded a $5 million withdrawal liability as of December 31, 2011.  In 2012, the Company increased the estimated withdrawal liability balance to $7.5 million, recording an expense of $2.5 million.  At this time, the Company has no plans to withdraw from any other agreements.  See Note 17 — Multiemployer Plans

Worker's compensation insurance

Worker’s compensation insurance—The Company self-insures worker’s compensation claims to a certain level. The Company maintained a self-insurance reserve totaling $16,547 and $13,809 at December 31, 2012 and 2011, respectively. The amount is included in “accrued expenses and other current liabilities” on the accompanying consolidated balance sheets. Claims administration expenses are charged to current operations as incurred. Future actual payments may materially differ from these reserves.

Fair value of financial instruments

Fair value of financial instruments—The consolidated financial statements include financial instruments for which the fair value may differ from amounts reflected on a historical basis. Financial instruments of the Company consist of cash, accounts receivable, short-term investments, accounts payable and certain accrued liabilities.  These financial instruments generally approximate fair market value based on the short-term nature of these instruments.  The carrying value of the Company’s long-term debt approximates fair value based on comparison with current prevailing market rates for loans of similar risks and maturities.

In May 2011, the FASB issued ASU No. 2011-04, Fair Value Measurement: Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS, which provides amendments to FASB ASC Topic 820, Fair Value Measurement. The objective of ASU 2011-04 is to create common fair value measurement and disclosure requirements between GAAP and International Financial Reporting Standards (“IFRS”). The amendments clarify existing fair value measurement and disclosure requirements and make changes to particular principles or requirements for measuring or disclosing information about fair value measurements.  On January 1, 2012, the Company adopted ASU 2011-04 which did not have a material impact on its consolidated financial statements.

Accounts receivable

Accounts receivable—Contract receivables are primarily concentrated from public and private companies and governmental agencies located throughout the United States and Canada. Credit terms for payment of products and services are extended to customers in the normal course of business and no interest is charged. Contract receivables are generally progress billings on projects, and as a result, are short term in nature.  The Company requires no collateral from its customers, but follows the practice of filing statutory liens or stop notices on all construction projects when collection problems are anticipated. The Company uses the allowance method of accounting for losses from uncollectible accounts. Under this method an allowance is provided based upon historical experience and management’s evaluation of outstanding contract receivables at the end of each year. Receivables are written off in the period deemed uncollectible. The allowance for doubtful accounts at December 31, 2012 and 2011 was $432 and $363, respectively.

Revenue recognition

Revenue recognition—Historically, substantial portions of the Company’s revenues have been generated under fixed-price contracts. Fixed-price contracts carry certain inherent risks, including underestimation of costs, problems with new technologies and economic and other changes that may occur over the contract period. The Company recognizes revenues using the percentage-of-completion method for fixed-price contracts, which may result in uneven and irregular results. Unforeseen events and circumstances can alter the estimate of the costs and potential profit associated with a particular contract.  Total estimated costs, and thus contract revenues and income, can be impacted by changes in any of the following:  productivity, scheduling, the unit cost of labor, subcontracts, materials and equipment. Additionally, external factors such as weather, client needs, client delays in providing permits and approvals, labor availability, governmental regulation and politics may affect the progress of a project’s completion and thus the timing of revenue recognition.  To the extent that original cost estimates are modified, estimated costs to complete increase, delivery schedules are delayed, or progress under a contract is otherwise impeded, cash flow, revenue recognition and profitability from a particular contract may be adversely affected.

In the percentage-of-completion method, estimated revenues and resulting contract income is calculated based on the total costs incurred to date as a percentage of total estimated costs. If an estimate of total contract cost indicates a loss on a contract, the projected loss is recognized in full at the time of the estimate.  The full loss amount is recognized as an “accrued loss provision” on the balance sheet.  As the percentage-of-completion method is used to calculate revenues, the accrued loss provision is changed so that the gross profit for the contract is zero.

Other contract forms

Other contract forms—In addition, the Company also uses unit-price, time and material, and cost reimbursable plus fee contracts.  For these jobs, revenue is recognized based on contractual terms.  For example, time and material contract revenues are recognized based on purchasing and employee time records.  Similarly, unit price contracts recognize revenue based on accomplishment of specific units at a specified unit price.

For all of its contracts, the Company includes the provision for estimated losses on uncompleted contracts in accrued expenses. The provision for estimated losses on uncompleted contracts was $764 and $917 for the years ended December 31, 2012 and 2011, respectively. Changes in job performance, job conditions and estimated profitability, including those arising from final contract settlements, may result in revisions to costs and income. These revisions are recognized in the period in which the revisions are determined. Claims are included in revenues when realization is probable and amounts can be reliably determined. Revenues in excess of contract costs incurred on claims are recognized only when the amounts have been paid.

The caption “Costs and estimated earnings in excess of billings” represents unbilled receivables which arise when revenues have been recorded but the amount cannot be billed under the terms of the contract until a later date.  Balances may represent:  (a) unbilled amounts arising from the use of the percentage-of-completion method of accounting, (b) incurred costs to be billed under cost reimbursement type contracts, or (c) amounts arising from routine lags in billing.  For those contracts in which billings exceed contract revenues recognized to date, excesses are included in the caption “Billings in excess of costs and estimated earnings”.

The Company considers unapproved change orders to be contract variations for which Primoris has customer approval for a scope change but a price change associated with the scope change has not yet been agreed upon.  Costs associated with unapproved change orders are included in the estimated cost to complete the contracts and are treated as project costs as incurred. The Company recognizes revenue equal to costs incurred on unapproved change orders when realization of price approval is probable and the estimated revenue amount is equal to or greater than the costs related to the unapproved change order. Unapproved change orders involve the use of estimates, and it is reasonably possible that revisions to the estimated costs and recoverable amounts may be required in future reporting periods to reflect changes in estimates or final agreements with customers.

The Company considers claims to be amounts Primoris seeks, or will seek, to collect from customers or others for customer-caused changes in contract specifications or design, or other customer-related causes of unanticipated additional contract costs on which there is no agreement with customers on both scope and price changes. Revenue from claims is recognized when agreement is reached with customers as to the value of the claims, which in some instances may not occur until after completion of work under the contract. Costs associated with claims are included in the estimated costs to complete the contracts and are treated as project costs when incurred.

In accordance with applicable terms of construction contracts, certain retainage amounts may be withheld by customers until completion and acceptance of the project.  Final payments of the majority of retainage may not be made until the following operating cycle.

Significant revisions in contract estimates

Significant revisions in contract estimates—As previously discussed, revenue recognition is based on the percentage-of-completion method for firm fixed-price contracts. Under this method, the costs incurred to date as a percentage of total estimated costs are used to calculate the revenue to be recognized. Total estimated costs, and thus contract income, are impacted by many factors.

For projects that are in process in the prior year, but are either completed or continue to be in process during the current year, there can be a difference in revenues and profits related to the prior year, had current year estimates of costs to complete been known in the prior year.

During the year ended December 31, 2012, certain contracts had revisions in estimates from those projected in 2011.  If the revised estimates as of December 31, 2012 had been applied in the prior year, the gross profit earned on these contracts would have resulted in an increase of approximately $8,185 in gross profit in 2011, or approximately $0.10 per diluted share.   Similarly, the revised estimates as of December 31, 2011 had been applied in the prior year; the gross profit earned on these contracts would have resulted in an increase of approximately $10,244 in 2010, or approximately $0.12 per diluted share.  In addition, the revised estimates for the year ended December 31, 2010 would have resulted in a gross profit increase of approximately $9,892 in the year 2009, or approximately $0.13 per diluted share.

Customer concentration

Customer concentration — The Company operates in multiple industry segments encompassing the construction of commercial, industrial and public works infrastructure assets throughout primarily the United States. Typically, the top ten customers in any one calendar year generate revenues in excess of 50% of total revenues; however in most years a different group make up the top ten customers.

For the years ended December 31, 2012 and 2011, revenues generated by the top ten customers were $862.3 million and $1,000 million, respectively, which represented 55.9% and 68.5%, respectively, of total revenues during the periods.

During the years ending December 31, 2012 and 2011, the Louisiana DOT represented 11.1% and 16.4%, respectively, of total revenues and a large gas and electric utility represented 14.6% and 11.3%, respectively, of total revenues. During the year ending December 31, 2012 and 2011, revenues generated by Rockford under the Ruby contract were $12.6 million and $274.9 million, respectively, which represented 0.8% and 18.8%, respectively, of total revenues during the periods.  The Ruby contract was part of a large project for the construction of a natural gas pipeline from Wyoming to Oregon for which field work was substantially completed in 2011.

At December 31, 2012, approximately 10.0% of the Company’s accounts receivable were due from one customer, and that customer provided 14.6% of the Company’s revenues during 2012.  At December 31, 2011, approximately 15.5% of the Company’s accounts receivable were due from one customer, and that customer provided 11.3% of the Company’s revenues during 2011.

Property and equipment

Property and equipment—Property and equipment are recorded at cost and are depreciated using the straight-line method over the estimated useful lives of the related assets, usually ranging from three to thirty years. Maintenance and repairs are charged to expense as incurred. Significant renewals and betterments are capitalized. At the time of retirement or other disposition of property and equipment, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is reflected in operations.

The Company assesses the recoverability of property and equipment by determining whether the depreciation of property and equipment over its remaining life can be recovered through projected undiscounted future cash flows. The amount of property and equipment impairment if any, is measured based on fair value and is charged to operations in the period in which property and equipment impairment is determined by management. As of December 31, 2012 and 2011, the Company’s management has not identified any material impairment of its property and equipment.

Taxes collected from customers

Taxes collected from customers—Taxes collected from the Company’s customers are recorded on a net basis.

Share-based payments and stock-based compensation

Share-based payments and stock-based compensation—In July 2008, the shareholders approved and the Company adopted the Primoris Services Corporation 2008 Long-term Incentive Equity Plan (“2008 Equity Plan”).   Under the terms of the 2008 Equity Plan, the Company issued 111,790 shares of stock in 2012 and 94,966 shares of stock in 2011, purchased by our employees who are participants in the Primoris Long-term Retention Plan.  The shares have a six-month restriction on any trades.  As part of the quarterly compensation of the non-employee members of the Board of Directors, the Company issued 27,675 shares of common stock during 2012 and 14,825 shares of common stock during 2011 under the 2008 Equity Plan.  The shares were fully vested and have a one-year restriction on any trades.  As of December 31, 2012, there were 1,270,744 shares of common stock reserved to provide for the grant and exercise of all future stock option issuances, stock appreciation rights (“SARS”) and grants of restricted shares under the 2008 Equity Plan.

Under guidance of ASC Topic 718 “Compensation — Stock Compensation”, stock-based compensation cost is measured at the date of grant, based on the calculated fair value of the stock-based award, and is recognized as expense over the employee’s requisite service period (generally the vesting period of the award).

Contingent Earnout Liabilities

Contingent Earnout Liabilities—As part of recent acquisitions, the Company has agreed to issue additional shares of common stock, or makes payments of cash, to the sellers upon meeting certain operating performance targets for certain periods subsequent to the acquisition date.  Each period, the Company evaluates the fair value of the estimated contingency and records a non-operating charge for the change in the fair value.  Upon meeting the target, the Company reflects the full liability on the balance sheet and records as a charge to selling, general and administration expense for the change in the fair value of the liability from the prior period.  The liability will be settled by issuing the agreed upon values of stock or amount of cash to be paid, as determined by the purchase agreement.

In March 2011, the Company issued 1,095,646 shares of common stock to the sellers of JCG after achieving a specific operating performance target for 2010.

The Rockford 2011 earnout target was achieved in 2011 and the Company reflected the liability on the balance sheet at December 31, 2011.  The liability was settled by issuing 232,637 shares of common stock to the sellers and making a cash payment of $3.45 million in April 2012.  The Rockford 2012 earnout target was achieved in 2012 and the Company reflected the liability on the balance sheet at December 31, 2012.  The liability will be settled by making a cash payment of $6.9 million in March 2013.

As part of the Sprint acquisition in March 2012, the Company agreed to issue additional cash to the sellers upon meeting certain operating performance targets for 2012 and 2013.  The Sprint 2012 earnout target was achieved in 2012 and a $4.0 million liability was recorded on the balance sheet at December 31, 2012.  The liability will be settled by making a cash payment in March 2013.

Derivative instruments and hedging activities

Derivative instruments and hedging activities—From time to time, the Company utilizes foreign currency hedge agreements to manage its Canadian currency exchange exposures, which are accounted for in accordance with ASC Topic 815 “Derivatives and Hedging”.  During the twelve months ended December 31, 2012 and 2011, the Company had no derivative financial instruments.

Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements

Fair Value Disclosures

In May 2011, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2011-04, Fair Value Measurement: Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS, which provides amendments to FASB ASC Topic 820, Fair Value Measurement. The objective of ASU 2011-04 is to create common fair value measurement and disclosure requirements between GAAP and International Financial Reporting Standards (“IFRS”). The amendments clarify existing fair value measurement and disclosure requirements and make changes to particular principles or requirements for measuring or disclosing information about fair value measurements.  On January 1, 2012, the Company adopted ASU 2011-04, which did not have a material impact on its consolidated financial statements.

Goodwill Impairment Testing

In September 2011, the FASB issued ASU 2011-08, Intangibles — Goodwill and Other (Topic 350): Testing Goodwill or Impairment (“ASU 2011-08”).  ASU 2011-08 provides an option to assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If an entity determines that the fair value is not less than its carrying amount, then it is not necessary to perform the two-step impairment test.  An entity can choose to perform the qualitative assessment on none, some or all of its reporting units.  An entity can also bypass the qualitative assessment for any reporting unit in any period and proceed directly to step one of the impairment test, and then resume performing the qualitative assessment in any subsequent period.  ASU 2011-08 also includes new qualitative indicators that replace those currently used to determine whether an interim goodwill impairment test is required to be performed. On January 1, 2012, the Company adopted this standard which did not have a material impact on the Company’s financial position, results of operations or cash flows.

Intangible Asset Impairment Testing

In July 2012, the FASB issued ASU 2012-02, Intangibles — Goodwill and Other (Topic 350):  Testing Indefinite-Lived Intangible Assets for Impairment (“ASU 2012-02”).  ASU 2012-02 allows an organization the option of first assessing qualitative factors to determine if a quantitative impairment test of the indefinite-lived intangible asset is necessary.  If the qualitative assessment reveals that it is “more likely than not” that the asset is impaired, a calculation of the asset’s fair value is required.  Otherwise, no quantitative calculation, as outlined in Subtopic 350-30 is necessary.  ASU 2012-02 is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012.  The Company adopted this standard on October 1, 2012, the date of the Company’s annual impairment review.  The adoption of ASU 2012-02 did not have a material impact on the Company’s financial position, results of operations or cash flows.

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Warrants and Purchase Options For Purchase of Stock (Details) (USD $) In Thousands, except Share data, unless otherwise specified	0 Months Ended			1 Months Ended		3 Months Ended	9 Months Ended	12 Months Ended
	Oct. 02, 2011	Jun. 29, 2011	Oct. 02, 2010	Sep. 28, 2010	Oct. 31, 2006	Jun. 30, 2011	Sep. 30, 2010	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009	Oct. 10, 2006
Warrants
Number of shares of common stock that can be purchased with each warrant											1
Exercise price of warrants (in dollars per share)											$ 5.00
Warrants outstanding (in shares)										4,617,499
Warrants exercised (in shares)							4,337,909
Cash proceeds from exercise of warrants							$ 21,690		$ 21,690
Warrants repurchased by the broker (in shares)				245,846
Repurchase of warrants				277					277
Warrants expired (in shares)			33,744
Unit Purchase Options
Purchase of Unit Purchase Options by the underwriter, Early Bird Capital					450,000
Number of shares of common stock that can be purchased with each UPO					1
Number of warrants that can be purchased with each UPO					1
Exercise price for cashless conversion of one share of common stock (in dollars per share)	$ 8.80
UPO exercised (in shares)		450,000
Previous day's closing price used to calculate the number of shares of common stock issuable on exercise of UPO (in dollars per share)		$ 13.31
Number of shares of common stock issuable on exercise of UPO at the previous day's closing price		152,480
Cash payment made in lieu of issuance of shares						$ 2,000		$ 2,030

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Accounts Payable and Accrued Liabilities (Tables)

12 Months Ended

Dec. 31, 2012

Accounts Payable and Accrued Liabilities

Summary of accrued expenses and other current liabilities

	2012		2011
Payroll and related employee benefits	$	33,086	$	29,110
Insurance, including self-insurance reserves	22,982		18,732
Reserve for estimated losses on uncompleted contracts	764		917
Corporate income taxes and other taxes	3,779		1,546
Accrued overhead cost	2,007		1,819
Current liabilities of discontinued operations	133		733
Other	13,401		7,066
	$	76,152	$	59,923

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Summary of Significant Accounting Policies (Details 3) (USD $) In Thousands, unless otherwise specified	3 Months Ended								12 Months Ended
	Dec. 31, 2012	Sep. 30, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2011	Sep. 30, 2011	Jun. 30, 2011	Mar. 31, 2011	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Customer concentration
Revenues	$ 480,883	$ 431,842	$ 337,436	$ 291,573	$ 373,066	$ 375,483	$ 351,956	$ 359,645	$ 1,541,734	$ 1,460,150	$ 941,765
Revenues | Customer concentration
Customer concentration
Revenues									690,670	679,787	389,040
Percentage of concentration risk									44.80%	46.50%	41.20%
Revenues | Customer concentration | Top ten customers
Customer concentration
Number of top customers									10
Number of calendar years in which top customers typically generate minimum specified percentage of revenue									1
Revenues									862,300	1,000,000
Percentage of concentration risk									55.90%	68.50%	55.30%
Revenues | Customer concentration | Top ten customers | Minimum
Customer concentration
Minimum percentage of revenues generated by top ten customers									50.00%
Revenues | Customer concentration | Louisiana DOT
Customer concentration
Revenues									170,899	239,516	193,139
Percentage of concentration risk									11.10%	16.40%	20.50%
Revenues | Customer concentration | Large gas and electric utility
Customer concentration
Percentage of concentration risk									14.60%	11.30%
Revenues | Customer concentration | Ruby contract
Customer concentration
Revenues									$ 12,600	$ 274,900
Percentage of concentration risk									0.80%	18.80%
Revenues | Customer concentration | One customer
Customer concentration
Percentage of concentration risk									14.60%	11.30%
Accounts receivable | Customer concentration | One customer
Customer concentration
Percentage of concentration risk									10.00%	15.50%
Number of customers									1	1

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Reportable Operating Segments (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended								12 Months Ended
	Dec. 31, 2012	Sep. 30, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2011	Sep. 30, 2011	Jun. 30, 2011	Mar. 31, 2011	Dec. 31, 2012 item	Dec. 31, 2011	Dec. 31, 2010
Reportable Operating Segments
Number of operating segments									3
Segment reporting information
Revenue	$ 480,883	$ 431,842	$ 337,436	$ 291,573	$ 373,066	$ 375,483	$ 351,956	$ 359,645	$ 1,541,734	$ 1,460,150	$ 941,765
% of Segment Revenue									100.00%	100.00%	100.00%
Gross Profit	54,819	56,291	44,004	37,596	51,046	52,121	41,406	40,630	192,710	185,203	122,789
% of Segment Revenue									12.50%	12.70%	13.00%
Goodwill	116,941				94,179				116,941	94,179
East Construction Services
Segment reporting information
Revenue									662,248	528,745	480,533
% of Segment Revenue									43.00%	36.20%	51.00%
Gross Profit									63,811	57,118	48,770
% of Segment Revenue									7.60%	10.80%	10.10%
Goodwill	69,859				59,659				69,859	59,659
West Construction Services
Segment reporting information
Revenue									832,860	881,733	402,273
% of Segment Revenue									54.00%	60.40%	42.70%
Gross Profit									119,328	118,385	61,897
% of Segment Revenue									14.30%	13.40%	15.40%
Goodwill	44,641				32,079				44,641	32,079
Engineering
Segment reporting information
Revenue									46,626	49,672	58,959
% of Segment Revenue									3.00%	3.40%	6.30%
Gross Profit									9,571	9,700	12,122
% of Segment Revenue									20.50%	19.50%	20.60%
Goodwill	$ 2,441				$ 2,441				$ 2,441	$ 2,441

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CONSOLIDATED BALANCE SHEETS (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Dec. 31, 2011
Current assets:
Cash and cash equivalents	$ 157,551	$ 120,306
Short term investments	3,441	23,000
Customer retention deposits and restricted cash	35,377	31,490
Accounts receivable, net	268,095	187,378
Costs and estimated earnings in excess of billings	41,701	41,866
Inventory and uninstalled contract materials	37,193	31,926
Deferred tax assets	10,477	10,659
Prepaid expenses and other current assets	10,800	13,252
Total current assets	564,635	459,877
Property and equipment, net	184,840	129,649
Investment in non-consolidated entities	12,813	12,687
Intangible assets, net	51,978	32,021
Goodwill	116,941	94,179
Total assets	931,207	728,413
Current liabilities:
Accounts payable	151,546	106,725
Billings in excess of costs and estimated earnings	158,892	137,729
Accrued expenses and other current liabilities	76,152	59,923
Dividends payable		1,532
Current portion of capital leases	3,733	6,623
Current portion of long-term debt	19,446	13,870
Current portion of subordinated debt		15,167
Current portion of contingent earnout liabilities	10,900	3,450
Total current liabilities	420,669	345,019
Long-term capital leases, net of current portion	3,831	4,047
Long-term debt, net of current portion	128,367	55,852
Long-term subordinated debt, net of current portion		7,334
Deferred tax liabilities	20,018	21,079
Long-term contingent earnout liabilities, net of current portion	12,531	9,268
Other long-term liabilities	13,153	10,882
Total liabilities	598,569	453,481
Commitments and contingencies
Stockholders' equity
Preferred stock-$.0001 par value, 1,000,000 shares authorized, none issued and outstanding at December 31, 2012 and 2011
Common stock-$.0001 par value; 90,000,000 shares authorized; 51,403,686 and 51,059,132 issued and outstanding at December 31, 2012 and 2011, respectively	5	5
Additional paid-in capital	155,605	150,003
Retained earnings	175,517	124,924
Non-controlling interest	1,511
Total stockholders' equity	332,638	274,932
Total liabilities and stockholders' equity	$ 931,207	$ 728,413

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Customer Concentrations (Tables)

12 Months Ended

Dec. 31, 2012

Customer Concentrations

Schedule of revenue from customers

Description of Customer’s	2012				2011				2010
Business	Amount		Percentage		Amount		Percentage		Amount		Percentage
Texas DOT	$	88,783	5.8	%	$	*	*		$	*	*
Public gas and electric utility	224,845		14.6	%	165,373		11.3	%	69,212		7.3	%
Gas utility	86,786		5.6	%	*		*		*		*
Private gas and electric utility	106,804		6.9	%	*		*		*		*
Louisiana DOT	170,899		11.1	%	239,516		16.4	%	193,139		20.5	%
Public state agency	*		*		*		*		47,465		5.0	%
Gas utility (Ruby Pipeline Project)	12,553		0.8	%	274,898		18.8	%	79,224		8.4	%
	$	690,670	44.8	%	$	679,787	46.5	%	$	389,040	41.2	%

(*) Indicates a customer with less than 5% of revenues during such period.

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CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Cash flows from operating activities:
Net income	$ 58,267,000	$ 58,559,000	$ 33,616,000
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation	29,080,000	24,104,000	17,904,000
Amortization of intangible assets	6,543,000	9,699,000	6,580,000
Goodwill and intangible impairment			1,732,000
Loss (gain) on sale of property and equipment	(2,752,000)	335,000	(1,359,000)
Income from non-consolidated entities	(186,000)	(4,018,000)	(4,630,000)
Distributions received from non-consolidated entities	1,358,000	10,136,000	9,491,000
Net deferred tax liabilities (assets)	(879,000)	7,453,000	(1,091,000)
Changes in assets and liabilities:
Customer retention deposits and restricted cash	(3,887,000)	(18,972,000)	(5,673,000)
Accounts receivable	(52,092,000)	20,767,000	(42,148,000)
Costs and estimated earnings in excess of billings	5,426,000	(24,591,000)	(3,765,000)
Other current assets	(1,341,000)	(6,654,000)	(6,837,000)
Other long term assets	0
Accounts payable	34,338,000	17,241,000	12,391,000
Billings in excess of costs and estimated earnings	20,639,000	(67,539,000)	55,825,000
Contingent earnout liabilities	(1,435,000)	2,927,000	290,000
Accrued expenses and other current liabilities	3,176,000	3,318,000	5,375,000
Other long-term liabilities	2,138,000	6,735,000	4,147,000
Net cash provided by operating activities	98,393,000	39,500,000	81,848,000
Cash flows from investing activities:
Purchase of property and equipment	(37,395,000)	(29,052,000)	(23,640,000)
Proceeds from sale of property and equipment	9,035,000	3,443,000	2,967,000
Purchase of short-term investments	(6,869,000)	(36,000,000)	(44,000,000)
Sale of short-term investments	26,428,000	39,000,000	48,058,000
Investment in non-consolidated entities			(18,065,000)
Cash paid for acquisitions	(86,207,000)		(39,120,000)
Cash acquired with acquisitions			19,623,000
Net cash used in by investing activities	(95,008,000)	(22,609,000)	(54,177,000)
Cash flows from financing activities:
Proceeds from issuance of long-term debt	94,471,000	44,000,000	27,500,000
Repayment of capital leases	(9,021,000)	(6,282,000)	(4,600,000)
Repayment of long-term debt	(26,633,000)	(22,329,000)	(12,696,000)
Repayment of subordinated debt	(17,501,000)	(20,710,000)	(27,001,000)
Purchase of Unit Purchase Option		(2,030,000)
Proceeds from issuance of common stock for warrants			21,690,000
Proceeds from issuance of common stock purchased by management under long-term incentive plan	1,240,000	647,000
Stock issued to foreign managers			390,000
Repurchase of warrants			(277,000)
Repurchase of common stock	(1,001,000)
Dividends paid	(7,695,000)	(5,318,000)	(4,404,000)
Cash distributions to former James shareholders			(1,966,000)
Net cash provided by (used in) financing activities	33,860,000	(12,022,000)	(1,364,000)
Cash flows from discontinued operations
Operating activities			(874,000)
Net change in cash and cash equivalents	37,245,000	4,869,000	25,433,000
Cash and cash equivalents at beginning of year	120,306,000	115,437,000	90,004,000
Cash and cash equivalents at end of the year	157,551,000	120,306,000	115,437,000
Cash paid during the year for:
Interest	3,004,000	4,765,000	6,131,000
Income taxes, net of refunds received	31,404,000	33,600,000	26,794,000
Components of cash paid for acquisitions:
Cash acquired			19,623,000
Fair value of assets acquired	136,146,000		141,570,000
Common stock issued	(980,000)		(13,600,000)
Contingent liabilities	(15,598,000)		(14,272,000)
Notes payable issued			(16,712,000)
Cash/stock payment due sellers after closing	(605,000)
Liabilities assumed	(32,756,000)		(77,489,000)
Cash paid for acquisitions	86,207,000		39,120,000
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITIES
Obligations incurred for the purchase of property and equipment	2,932,000	5,312,000
Dividends declared and not yet paid		$ 1,532,000	$ 1,234,000

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Business Combinations (Details 2) (USD $)	12 Months Ended										0 Months Ended	12 Months Ended				12 Months Ended					1 Months Ended	12 Months Ended					0 Months Ended		1 Months Ended	12 Months Ended	1 Months Ended	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2009	Dec. 31, 2012 Tradename Minimum	Dec. 31, 2012 Tradename Maximum	Dec. 31, 2012 Non-compete agreements Minimum	Dec. 31, 2012 Non-compete agreements Maximum	Dec. 31, 2012 Customer relationships Minimum	Dec. 31, 2012 Customer relationships Maximum	Dec. 31, 2012 Backlog	Mar. 12, 2012 Sprint	Dec. 31, 2012 Sprint	Dec. 31, 2012 Sprint Tradename	Dec. 31, 2012 Sprint Non-compete agreements	Dec. 31, 2012 Sprint Customer relationships	Dec. 31, 2012 Saxon	Sep. 28, 2012 Saxon	Dec. 31, 2012 Saxon Non-compete agreements	Dec. 31, 2012 Saxon Customer relationships	Dec. 31, 2012 Saxon Backlog	Feb. 28, 2013 Q3 Contracting	Dec. 31, 2012 Q3 Contracting	Nov. 17, 2012 Q3 Contracting	Dec. 31, 2012 Q3 Contracting Tradename	Dec. 31, 2012 Q3 Contracting Non-compete agreements	Dec. 31, 2012 Q3 Contracting Customer relationships	Nov. 12, 2010 Rockford	Dec. 31, 2012 Rockford	Mar. 31, 2011 Rockford 2010 earnout target	Dec. 31, 2012 Rockford 2010 earnout target	Apr. 30, 2012 Rockford 2011 earnout target	Dec. 31, 2012 Rockford 2011 earnout target	Dec. 31, 2012 Rockford Tradename	Dec. 31, 2012 Rockford Non-compete agreements	Dec. 31, 2012 Rockford Customer relationships	Dec. 31, 2012 Rockford Backlog
Acquired intangible assets
Amortization Period				3 years	10 years	2 years	5 years	5 years	15 years	9 months
Fair Value											$ 3,600,000	$ 3,600,000	$ 700,000	$ 450,000	$ 2,450,000	$ 1,350,000	$ 1,350,000	$ 100,000	$ 1,150,000	$ 100,000		$ 21,550,000	$ 21,550,000	$ 6,650,000	$ 450,000	$ 14,450,000	$ 15,510,000	$ 15,510,000					$ 7,450,000	$ 2,100,000	$ 2,750,000	$ 3,210,000
Period for which goodwill and other intangible assets are deductible for income tax purposes												15 years				15 years						15 years
Goodwill not expected to be deductible for income tax purpose											9,389,000						810,000						12,562,000				32,079,000	32,079,000
Pro forma results
Percentage of pro forma tax rate used in calculating taxes on income from continuing operations	39.00%
Unregistered shares of common stock issued with an acquisition			81,852.78								62,052	62,052									29,273						1,605,709		494,095	494,095	232,637	232,637
Revenues	1,673,001	1,674,406
Income before provision for income taxes	95,254	90,799
Net income attributable to Primoris	$ 58,678	$ 54,940
Weighted average common shares outstanding:
Basic (in shares)	51,403	50,769
Diluted (in shares)	51,418	51,215
Earnings per share attributable to Primoris:
Basic (in dollars per share)	$ 1.14	$ 1.08
Diluted (in dollars per share)	$ 1.14	$ 1.07

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Accounts Receivable (Tables)

12 Months Ended

Dec. 31, 2012

Accounts Receivable

Summary of accounts receivable

	2012		2011
Contracts receivable, net of allowance for doubtful accounts of $432 and $363 for 2012 and 2011, respectively	$	227,548	$	166,298
Retention	39,710		20,378
	267,258		186,676
Due from affiliates	—		—
Other accounts receivable	837		702
	$	268,095	$	187,378

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Accounts Payable and Accrued Liabilities (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Dec. 31, 2011
Accounts Payable and Accrued Liabilities
Retention amounts included in accounts payable	$ 15,946	$ 13,980
Accrued expenses and other current liabilities
Payroll and related employee benefits	33,086	29,110
Insurance, including self-insurance reserves	22,982	18,732
Reserve for estimated losses on uncompleted contracts	764	917
Corporate income taxes and other taxes	3,779	1,546
Accrued overhead cost	2,007	1,819
Current liabilities of discontinued operations	133	733
Other	13,401	7,066
Total accrued expenses and other current liabilities	$ 76,152	$ 59,923

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Customer Concentrations

12 Months Ended

Dec. 31, 2012

Customer Concentrations

Customer Concentrations

Note 16—Customer Concentrations

The Company operates in multiple industry segments encompassing the construction of commercial, industrial, and public works infrastructure assets throughout primarily the United States.

During the years ended December 31, 2012, 2011 and 2010, the Company generated 44.8%, 46.5% and 41.2%, of its revenues, respectively, from the following customers:

Description of Customer’s	2012				2011				2010
Business	Amount		Percentage		Amount		Percentage		Amount		Percentage
Texas DOT	$	88,783	5.8	%	$	*	*		$	*	*
Public gas and electric utility	224,845		14.6	%	165,373		11.3	%	69,212		7.3	%
Gas utility	86,786		5.6	%	*		*		*		*
Private gas and electric utility	106,804		6.9	%	*		*		*		*
Louisiana DOT	170,899		11.1	%	239,516		16.4	%	193,139		20.5	%
Public state agency	*		*		*		*		47,465		5.0	%
Gas utility (Ruby Pipeline Project)	12,553		0.8	%	274,898		18.8	%	79,224		8.4	%
	$	690,670	44.8	%	$	679,787	46.5	%	$	389,040	41.2	%

(*) Indicates a customer with less than 5% of revenues during such period.

For the year ended December 31, 2012, 2011 and 2010, approximately 55.9%, 68.5% and 55.3%, respectively, of total revenues were generated from the top ten customers of the Company in that year.  In each of the years, a different group of customers comprised the top ten customers by revenue.

At December 31, 2012, approximately 10.0% of the Company’s accounts receivable were due from one customer, and that customer provided 14.6% of the Company’s revenues for the year ended December 31, 2012.   At December 31, 2011, approximately 15.5% of the Company’s accounts receivable were due from the same customer, which provided 11.3% of the Company’s revenues for the year ended December 31, 2011.

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Costs and Estimated Earnings on Uncompleted Contracts (Tables)

12 Months Ended

Dec. 31, 2012

Costs and Estimated Earnings on Uncompleted Contracts

Schedule of costs and estimated earnings on uncompleted contracts

	2012			2011
Costs incurred on uncompleted contracts	$	3,882,968		$	2,977,535
Accrued loss provision for estimated losses on uncompleted contracts	764			917
Gross profit recognized	448,928			303,634
	4,332,660			3,282,086
Less: billings to date	(4,449,851		)	(3,377,949		)
	$	(117,191	)	$	(95,863	)

Schedule of costs and estimated earnings on uncompleted contracts included in consolidated balance sheet

	2012			2011
Costs and estimated earnings in excess of billings	$	41,701		$	41,866
Billings in excess of cost and estimated earnings	(158,892		)	(137,729		)
	$	(117,191	)	$	(95,863	)

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Company Retirement Plans

12 Months Ended

Dec. 31, 2012

Company Retirement Plans

Company Retirement Plans

Note 18—Company Retirement Plans

401(k) Plan—The Company provides a 401(k) plan for its employees not covered by collective bargaining agreements. Under the plan, employees are allowed to contribute up to 100% of their compensation, within the Internal Revenue Service (“IRS”) prescribed annual limit.  The Company makes employer match contributions of 100% of the first 3% and 50% of the next 2% of employee contributions. The Company may, at the discretion of its Board of Directors, make an additional profit share contribution to the 401(k) plan.  The Company’s contribution to the plan for the years ended December 31, 2012, 2011 and 2010 were $2,267, $1,963 and $1,734, respectively.

Effective January 1, 2011, the members of the JCG 401(k) plan became eligible for entry into the Company plan and the JCG plan was terminated.  Effective October 1, 2011, the members of the Rockford 401(k) plan became eligible for entry into the Company plan and the Rockford plan was terminated.  The members of the Q3C 401(k) plan will become eligible for entry into the Company plan in 2013 and the Q3C plan will be terminated.  The employees of Sprint, Silva and Saxon had no 401(k) plans prior to the acquisitions and became eligible for the Company plan in 2012.

Born Heaters Canada, ULC RRSP-DPSP Plan—The Company provides a RRSP-DPSP plan (Registered Retirement Saving Plan—Deferred Profit Sharing Plan) for its employees of Born Heaters Canada, ULC, not covered by collective bargaining agreements. There are two components to the plan. The RRSP portion will be contributed by the employee, whereas the Company portion is paid in the DPSP. Under this plan, the company makes employer match contributions of 100% of the first 3% and 50% of the next 2% of employee contributions. Vesting in the DPSP portion is one year of employment. The Company’s contribution to the DPSP during the years ended December 31, 2012, 2011 and 2010 was $69, $78 and $86, respectively.

The Company has no other post-retirement benefits.

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Credit Arrangements (Details 2)	0 Months Ended	12 Months Ended				0 Months Ended	12 Months Ended			12 Months Ended			12 Months Ended							12 Months Ended			12 Months Ended
	Dec. 28, 2012 Senior Notes USD ($)	Dec. 31, 2012 Senior Notes USD ($)	Dec. 31, 2012 Senior Notes Minimum USD ($)	Dec. 31, 2012 Notes Agreement	Dec. 31, 2012 Notes Agreement Minimum	Dec. 28, 2012 Notes Agreement Maximum USD ($)	Dec. 31, 2012 Notes Agreement Maximum	Nov. 12, 2010 Subordinated Promissory Note Rockford USD ($)	Dec. 18, 2009 Subordinated Promissory Note JCG USD ($)	Dec. 31, 2012 Note A Rockford USD ($)	Nov. 12, 2010 Note A Rockford USD ($)	Nov. 12, 2010 Note B Rockford USD ($)	Dec. 31, 2012 Credit Agreement LIBOR	Dec. 31, 2012 Credit Agreement Base rate	Dec. 31, 2012 Credit Agreement Federal funds rate	Dec. 31, 2012 Credit Agreement Prime rate	Dec. 31, 2012 Credit Agreement Minimum	Dec. 31, 2012 Credit Agreement Revolving line of credit USD ($)	Dec. 28, 2012 Credit Agreement Revolving line of credit USD ($)	Dec. 31, 2012 Credit Agreement Revolving line of credit Minimum USD ($)	Dec. 31, 2012 Canadian Credit Facility Commercial letters of credit CAD	Dec. 31, 2011 Canadian Credit Facility Commercial letters of credit CAD	Dec. 31, 2012 Canadian Credit Facility Commercial letters of credit Maximum
Credit arrangements
Maximum borrowing capacity																			$ 75,000,000		10,000,000
Incremental maximum borrowing capacity																			50,000,000
Variable rate basis													LIBOR	Base Rate	Federal Funds Rate	prime rate
Basis spread on variable rate (as a percent)															0.50%
Prepayment to be paid on debt			5,000,000																	5,000,000
Additional borrowings	50,000,000
Interest rate (as a percent)		3.65%
Additional borrowings to be incurred during the first three years of the debt agreement						25,000,000
Number of years in which additional notes can be issued				3 years
Maturity term of debt instrument							10 years
Restrictions on investments, change of control provisions and provisions as a percentage of total assets to be disposed off					20.00%												20.00%
Total commercial letters of credit outstanding																		4,808,000			1,364,000	4,036,000
Available borrowing capacity																		70,192,000			8,636,000
Term of credit facility																							5 years
Annual fee (as a percent)																					1.00%
Required principal payment		7,100,000
Initial principal amount								16,712,000	53,500,000		9,669,000	7,043,000
Amount outstanding										5,000,000
Payment that the entity was required to make to cancel the notes										$ 1,500,000

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Nature of Business

12 Months Ended

Dec. 31, 2012

Nature of Business

Nature of Business

Note 1—Nature of Business

Organization and operations —Primoris Services Corporation is a holding company of various subsidiaries, which collectively are engaged in various construction and product engineering activities. The Company’s underground and directional drilling operations install, replace and repair natural gas, petroleum, telecommunications and water pipeline systems, including large diameter pipeline systems. The Company’s industrial, civil and engineering operations build and provide maintenance services to industrial facilities including power plants, petrochemical facilities, and other processing plants; construct multi-level parking structures; and engage in the construction of highways, bridges and other environmental construction activities. The Company is incorporated in the State of Delaware and in 2011 moved its corporate headquarters from Lake Forest, California to 2100 McKinney Avenue, Suite 1500, Dallas, Texas 75201.

The wholly-owned subsidiaries of Primoris include ARB, Inc. (“ARB”), ARB Structures, Inc., All Day Electric Company, Inc., OnQuest, Inc., Cardinal Contractors, Inc., Stellaris, LLC, James Construction Group LLC (“JCG”), Rockford Corporation (“Rockford”), Primoris Energy Services Corporation (“PES”) and Q3 Contracting, Inc (“Q3C”).

Primoris has been acquisitive over the last several years expanding both service capabilities and geographic footprint.  The acquisitions include:

· On December 18, 2009, we acquired JCG.  JCG is one of the largest general contractors based in the Gulf Coast states and is engaged in highway, industrial and environmental construction, primarily in Louisiana, Texas and Florida.

· On November 8, 2010, the Company acquired Rockford, which specializes in construction of large diameter natural gas and liquid pipeline projects and related facilities.

· During 2012, the Company made four acquisitions:

a. On March 12, 2012, the Company’s subsidiary, PES, purchased the assets of Sprint Pipeline Services, L.P. (“Sprint”) headquartered in Pearland (outside Houston), Texas.  Sprint provides a comprehensive range of pipeline construction, maintenance, upgrade, fabrication and specialty services primarily in the southeastern United States.  As part of the purchase, PES has the right to use the name of Sprint for a three year period.

b. On May 30, 2012, the Company’s subsidiary JCG, purchased certain of the assets of Silva Contracting Company, Inc., Tarmac Materials, LLC and C3 Interest, LLC (collectively “Silva”).  Silva provides transportation infrastructure maintenance, asphalt paving, and material sales in the Gulf Coast region of the United States.

c. On September 28, 2012, the Company purchased the assets of The Saxon Group (“Saxon”).  Based outside of Atlanta, Georgia, Saxon is a full service industrial construction enterprise with special expertise in the industrial gas processing and power plant sectors.

d. On November 17, 2012, the Company acquired Q3C Contracting, Inc.  Q3C specializes in small diameter pipeline and gas distribution construction, restorative and other services, primarily in the upper Midwest region of the United States.

In 2011, the Company entered into a joint venture agreement and formed Blythe Power Constructors for the installation of a parabolic trough solar field and steam generation system in California.

The Company’s common stock trades on the NASDAQ Select Global Market under the symbol “PRIM”.  In February 2008, Primoris Corporation (referred to as “Former Primoris”), a privately-held company, entered into an Agreement and Plan of Merger with Rhapsody Acquisition Corp. (“Rhapsody”), a publicly-held company.  Rhapsody was founded as a special purpose acquisition company in 2006, to affect a business combination with an operating business. In July 2008, the merger was completed and Rhapsody changed its name to “Primoris Services Corporation”.

Unless specifically noted otherwise, as used throughout these consolidated financial statements, “Primoris”, “the Company”, “we”, “our”, “us” or “its” refers to the business, operations and financial results of the Company and its wholly-owned subsidiaries.   Reclassifications have been made to prior year financial statement presentation to conform to the current year presentation.

Seasonality—Primoris’ results of operations are subject to quarterly variations. Some of the variation is the result of weather, particularly rain and snow, which can impact Primoris’ ability to perform construction services. While the majority of the Company’s work is in the southern half of the United States, these seasonal impacts affect revenues and profitability since gas and other utilities defer routine replacement and repair during their period of peak demand.  In addition, demand for new projects tends to be lower during the early part of the year due to clients’ internal budget cycles.  As a result, the Company usually experiences higher revenues and earnings in the third and fourth quarters of the year as compared to the first two quarters.

The Company is also dependent on large construction projects which tend not to be seasonal, but can fluctuate from year to year based on general economic conditions.  Because of the cyclical nature of its business, the financial results for any period may fluctuate from prior periods, and the Company’s financial condition and operating results may vary from quarter-to-quarter.  Results from one quarter may not be indicative of its financial condition or operating results for any other quarter or for an entire year.

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CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)	Dec. 31, 2012	Dec. 31, 2011
CONSOLIDATED BALANCE SHEETS
Preferred stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	1,000,000	1,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized	90,000,000	90,000,000
Common stock, shares issued	51,403,686	51,059,132
Common stock, shares outstanding	51,403,686	51,059,132

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Capital Leases

12 Months Ended

Dec. 31, 2012

Capital Leases

Capital Leases

Note 11—Capital Leases

The Company leases vehicles and certain equipment under capital leases. The economic substance of the leases is that the Company is financing the acquisition of vehicles and equipment through leases and accordingly, they are recorded in the Company’s assets and liabilities. Included in depreciation expense is amortization of vehicles and equipment held under capital leases, amortized over their useful lives on a straight-line basis.  As part of the November 12, 2010 Rockford acquisition, vehicles and equipment with a fair value of $12,501 were acquired and the related capital lease obligations were assumed.

At December 31, 2012 and 2011, the net book value of assets under capital leases was $10,382 and $12,304, respectively. The following is a schedule by year of the future minimum lease payments required under capital leases together with their present value as of December 31:

2013	$	3,921
2014	2,736
2015	1,141
2016	105
Total minimum lease payments	$	7,903
Amounts representing interest	(339		)
Net present value of minimum lease payments	7,564
Less: current portion of capital lease obligations	(3,733		)
Long-term capital lease obligations	$	3,831

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Document and Entity Information (USD $) In Millions, except Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Mar. 01, 2013	Jun. 29, 2012
Document and Entity Information
Entity Registrant Name	Primoris Services Corp
Entity Central Index Key	0001361538
Document Type	10-K
Document Period End Date	Dec. 31, 2012
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Public Float			$ 395.3
Entity Common Stock, Shares Outstanding		51,445,439
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	FY

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Credit Arrangements

12 Months Ended

Dec. 31, 2012

Credit Arrangements

Credit Arrangements

Note 12—Credit Arrangements

Credit facilities and long-term debt consist of the following at December 31:

	2012			2011
Commercial notes payable to a bank with interest rates from 2.16% to 4.12%. Monthly principal and interest payments are due in the amount of $518, with the final payment due December 23, 2016. The notes are secured by certain construction and automotive equipment of the Company	$	18,988		$	26,243
Commercial note payable to a bank with an interest rate of 4.71%. Principal and interest payments are due in the amount of $140 per month until the maturity date on July 1, 2017. The note is secured by certain construction equipment of the Company	6,800			8,125
Construction equipment note payable to a commercial equipment finance company, with an interest rate of 3.67% per annum. Principal and interest payments are due in the amount of $101 per month until the maturity date on December 31, 2017. The note is secured by certain construction equipment of the Company	5,550			6,543
Commercial notes payable to a bank with interest rates from 2.63% to 3.50%. Monthly principal and interest payments are due in the amount of $226, with the final payment due June 15, 2017. The notes are secured by certain construction and automotive equipment of the Company	10,441			12,811
Construction equipment note payable to a commercial equipment finance company, with an interest rate of 2.14% per annum. Principal and interest payments are due in the amount of $281 per month until the maturity date on November 30, 2016. The note is secured by certain construction equipment of the Company	12,935			16,000
Construction equipment notes payable to a commercial equipment finance company, with an interest rate of 2.23% to 2.44% per annum. Principal and interest payments are due in the amount of $294 per month until the maturity date on November 1, 2019. These notes are secured by certain construction and automotive equipment of the Company	21,713			—
Commercial notes payable to a commercial equipment finance company, with an interest rate of 2.05% to 3.51% per annum. Principal and interest payments are due in the amount of $193 per month until the maturity date on December 21, 2019. The notes are secured by certain construction equipment and real estate of the Company	17,800			—
Construction equipment note payable to a commercial equipment finance company, with an interest rate of 2.06% per annum. Principal and interest payments are due in the amount of $68 per month until the maturity date on August 13, 2017. The note is secured by certain construction equipment of the Company	3,586			—
Senior Secured Notes payable to an insurance finance company, with an interest rate of 3.65% per annum. Quarterly interest payments are due starting March 31, 2013. Principal repayments start on December 28, 2016 until the maturity date on December 28, 2022. The notes are secured by the assets of the Company	50,000			—
Total long-term debt	147,813			69,722
Less: current portion	(19,446		)	(13,870		)
Long-term debt, net of current portion	$	128,367		$	55,852

Scheduled maturities of long-term debt are as follows:

	Year Ending December 31,
2013	$	19,446
2014	20,002
2015	18,605
2016	25,116
2017	15,286
Thereafter	49,358
	$	147,813

Credit Agreements

Revolving Credit Facility

On December 28, 2012, the Company entered into a revolving credit facility (the “Credit Agreement”), by and among the Company, The PrivateBank and Trust Company, as administrative agent (the “Administrative Agent”) and co-lead arranger, The Bank of the West, as co-lead arranger and IBERIABANK Corporation (the “Lenders”). The Credit Agreement is a $75 million revolving credit facility whereby the lenders agree to make loans on a revolving basis from time to time and to issue letters of credit for up to the $75 million committed amount. The Credit Agreement also provides for an incremental facility of up to $50 million. The termination date of the Credit Agreement is December 28, 2017.

The principal amount of any loans under the Credit Agreement will bear interest at either: (i) LIBOR plus an applicable margin as specified in the Credit Agreement (based on the Company’s senior debt to EBITDA ratio), or (ii) the Base Rate (which is the greater of (a) the Federal Funds Rate plus 0.5% or (b) the prime rate as announced by the Administrative Agent). Quarterly non-use fees, letter of credit fees and administrative agent fees are payable by the Company at rates specified in the Credit Agreement.

The principal amount of any loan drawn under the Credit Agreement may be prepaid in whole or in part, with a minimum prepayment of $5 million, at any time, potentially subject to make-whole provisions.

The Credit Agreement includes customary restrictive covenants for facilities of this type, as discussed below.

Other than commercial letters of credit amounting to $4,808, there were no borrowings under this line of credit during the twelve months ended December 31, 2012, leaving available borrowing capacity at $70,192.

As part of the execution of the Credit Agreement described above, the previous Loan and Security Agreement dated October 29, 2009, as amended, between the Company and The Private Bank and Trust Company (the “PrivateBank Agreement”), was terminated. The Company was in compliance with the bank covenants at the time of the termination and there were no penalties or fees incurred as a result of the termination. There were no borrowings outstanding at the time of the termination and all letter of credit amounts issued and outstanding under the terminated agreement were transferred to the Lenders under the Credit Agreement discussed above.

In 2011, the Company entered into an agreement with Bank of the West whereby the Company agrees to maintain a cash balance at the bank equal to the full amount of certain commercial letters of credit.  The agreement was terminated and all the remaining liabilities were transferred to the Credit Agreement discussed above.

Senior Secured Notes and Shelf Agreement

On December 28, 2012, the Company also entered into a $50 million Senior Secured Notes purchase (“Senior Notes”) and a $25 million private shelf agreement (the “Notes Agreement”) by and among the Company and The Prudential Investment Management, Inc. and certain Prudential affiliates (the “Noteholders”).

A total of $50 million in Senior Notes was funded on December 28, 2012. The Senior Notes are due December 28, 2022 and bear interest at an annual rate of 3.65%, paid quarterly in arrears. Annual principal payments of $7.1 million are required beginning December 28, 2016 through December 28, 2021 with a final payment due on December 28, 2022. The principal amount may be prepaid in whole or in part, with a minimum prepayment of $5 million, at any time, subject to make-whole provisions.

The Notes Agreement provides for the issuance of additional notes of up to $25 million, during the first three years of the Notes Agreement with maturity dates no more than 10 years from the date issued, at the market interest rate for notes with equivalent terms and conditions.

All loans made under both the Credit Agreement and the Notes Agreement are secured by our assets, including, among others, our cash, inventory, goods, equipment (excluding equipment subject to permitted liens) and accounts receivable. All of our domestic subsidiaries have issued joint and several guaranties in favor of the Lenders and Noteholders for all amounts under the Credit Agreement and Notes Agreement.

Both the Credit Agreement and the Notes Agreement contain various restrictive and financial covenants including among others, minimum tangible net worth, senior debt/EBITDA ratio, debt service coverage requirements and a minimum balance for unencumbered net book value for fixed assets. In addition, the agreements include restrictions on investments, change of control provisions and provisions in the event the Company disposes more than 20% of its total assets.

The Company was in compliance with the bank covenants as of December 31, 2012.

Canadian Credit Facility

The Company has a credit facility with a Canadian bank for purposes of issuing commercial letters of credit in Canada, for an amount of up to $10,000 in Canadian dollars. The credit facility has an annual renewal and provides for the issuance of commercial letters of credit for a term of up to five years. The facility provides for an annual fee of 1% for any issued and outstanding commercial letters of credit. Letters of credit can be denominated in either Canadian or U.S. dollars. At December 31, 2012 and 2011, commercial letters of credit outstanding under this credit facility totaled $1,364 and $4,036 in Canadian dollars, respectively.  At December 31, 2012, the available borrowing capacity under this credit facility was $8,636 in Canadian dollars.  The credit facility contains a working capital restrictive covenant for our Canadian subsidiary, Born Heaters Canada.  At December 31, 2012, the Company was in compliance with the bank covenants.

Subordinated Promissory Note — Rockford.   In connection with the 2010 acquisition of Rockford, the Company executed an unsecured promissory note (the “Rockford Note”).

As a result of a dispute related to a certain liability at the time of the closing of the transaction, the Company ceased making principal and interest payments in May 2012, when the outstanding balance reached $5,000.  The balance was reclassified on the Company’s balance sheet from notes payable to accrued liabilities in September 2012.

In December 2012, the parties came to a resolution whereby the Company would pay $1,500 to cancel the subordinated note.  Final payment is expected in the first quarter of 2013.

Subordinated Promissory Note — JCG.   In connection with the acquisition of JCG, the Company executed an unsecured promissory note (the “JCG Note”) on December 18, 2009 in favor of the sellers of JCG with an initial principal amount of $53,500. The JCG Note was due and payable on December 15, 2014 and bore interest at differing rates until maturity.  The JCG note was paid in full on March 12, 2012.

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Earnings Per Share (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended								12 Months Ended
	Dec. 31, 2012	Sep. 30, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2011	Sep. 30, 2011	Jun. 30, 2011	Mar. 31, 2011	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Numerator:
Net income	$ 17,932	$ 17,948	$ 11,857	$ 10,530					$ 58,267	$ 58,559	$ 33,616
Net income attributable to non-controlling interests									(1,511)
Net income attributable to Primoris	$ 17,021	$ 17,516	$ 11,733	$ 10,486	$ 12,471	$ 19,348	$ 14,462	$ 12,278	$ 56,756	$ 58,559	$ 33,616
Denominator:
Weighted average shares for computation of basic earnings per share	51,404	51,398	51,435	51,096	51,059	51,054	51,044	49,675	51,391	50,707	42,694
Dilutive effect of warrants and units (in shares)										51	908
Dilutive effect of contingently issuable shares										386	989
Dilutive effect of shares issued to independent directors									11	9
Dilutive effect of JCG convertible preferred shares											2,287
Dilutive effect of shares to be issued to Q3C sellers									4
Weighted average shares for computation of diluted earnings per share	51,418	51,404	51,435	51,337	51,292	51,054	51,154	51,051	51,406	51,153	46,878
Earnings per share:
Basic earnings per share (in dollars per share)	$ 0.33	$ 0.34	$ 0.23	$ 0.21	$ 0.24	$ 0.38	$ 0.28	$ 0.25	$ 1.10	$ 1.15	$ 0.79
Diluted earnings per share (in dollars per share)	$ 0.33	$ 0.34	$ 0.23	$ 0.20	$ 0.24	$ 0.38	$ 0.28	$ 0.24	$ 1.10	$ 1.14	$ 0.72

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CONSOLIDATED STATEMENTS OF INCOME (USD $) In Thousands, except Per Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
CONSOLIDATED STATEMENTS OF INCOME
Revenues	$ 1,541,734	$ 1,460,150	$ 941,765
Cost of revenues	1,349,024	1,274,947	818,976
Gross profit	192,710	185,203	122,789
Selling, general and administrative expenses	96,424	86,204	64,985
Operating income	96,286	98,999	57,804
Other income (expense):
Income from non-consolidated entities	186	4,018	4,630
Foreign exchange gain (loss)	(36)	(96)	250
Other expense	(870)	(1,088)	(1,429)
Interest income	157	331	616
Interest expense	(3,619)	(5,431)	(6,196)
Income before provision for income taxes	92,104	96,733	55,675
Provision for income taxes	(33,837)	(38,174)	(22,059)
Net income	58,267	58,559	33,616
Less net income attributable to noncontrolling interests	(1,511)
Net income attributable to Primoris	$ 56,756	$ 58,559	$ 33,616
Dividends per common share (in dollars per share)	$ 0.12	$ 0.11	$ 0.10
Earnings per share attributable to Primoris:
Basic (in dollars per share)	$ 1.10	$ 1.15	$ 0.79
Diluted (in dollars per share)	$ 1.10	$ 1.14	$ 0.72
Weighted average common shares outstanding:
Basic (in shares)	51,391	50,707	42,694
Diluted (in shares)	51,406	51,153	46,878

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Costs and Estimated Earnings on Uncompleted Contracts

12 Months Ended

Dec. 31, 2012

Costs and Estimated Earnings on Uncompleted Contracts

Costs and Estimated Earnings on Uncompleted Contracts

Note 6—Costs and Estimated Earnings on Uncompleted Contracts

Costs and estimated earnings on uncompleted contracts consist of the following at December 31:

	2012			2011
Costs incurred on uncompleted contracts	$	3,882,968		$	2,977,535
Accrued loss provision for estimated losses on uncompleted contracts	764			917
Gross profit recognized	448,928			303,634
	4,332,660			3,282,086
Less: billings to date	(4,449,851		)	(3,377,949		)
	$	(117,191	)	$	(95,863	)

This net amount is included in the accompanying consolidated balance sheet at December 31 under the following captions:

	2012			2011
Costs and estimated earnings in excess of billings	$	41,701		$	41,866
Billings in excess of cost and estimated earnings	(158,892		)	(137,729		)
	$	(117,191	)	$	(95,863	)

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Accounts Receivable

12 Months Ended

Dec. 31, 2012

Accounts Receivable

Accounts Receivable

Note 5—Accounts Receivable

The following is a summary of accounts receivable at December 31:

	2012		2011
Contracts receivable, net of allowance for doubtful accounts of $432 and $363 for 2012 and 2011, respectively	$	227,548	$	166,298
Retention	39,710		20,378
	267,258		186,676
Due from affiliates	—		—
Other accounts receivable	837		702
	$	268,095	$	187,378

Amounts “due from affiliates” primarily relate to amounts due from related parties (See Note 8 “Equity Method Investments” and Note 20 “Related Party Transactions”) for the performance of construction contracts.  At December 31, 2012 and 2011, there were no amounts due from affiliates.  Contract revenues earned from related parties were approximately $502, $5,681 and $1,568 for the years ended December 31, 2012, 2011 and 2010, respectively.

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Multiemployer Plans

12 Months Ended

Dec. 31, 2012

Multiemployer Plans

Multiemployer Plans

Note 17 — Multiemployer Plans

Union Plans—The Company contributes to multiemployer benefit plans for its union employees at rates determined by the various collective bargaining agreements.  Each plan’s trustees determine the eligibility and allocations of contributions and benefit amounts, determine the types of benefits, and administer the plan.

The Company contributed $30,103, $24,182 and $12,590, to multiemployer pension plans for the years ended December 31, 2012, 2011 and 2010, respectively. These costs were charged to the related construction contracts in process.  As a result of the November 2010 acquisition of Rockford, contributions during 2011 increased substantially, especially from the large workload associated with the Ruby contract.

For the Company, the financial risks of participating in multiemployer plans are different from single-employer plans in the following respects:

· 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 the plan, the unfunded obligations of the plan may be borne by the remaining participating employers.

· If a participating employer chooses to stop participating in the plan, a withdrawal liability may be created based on the unfunded vested benefits for all employees in the plan.

Under U.S. legislation regarding multiemployer pension plans, a company is required to pay an amount that represents its proportionate share of a plan’s unfunded vested benefits in the event of withdrawal from a plan or upon plan termination.

The Company participates in a number of multiemployer pension plans, and its potential withdrawal obligation may be significant.  Any withdrawal liability would be recorded when it is probable that a liability exists and can be reasonably estimated, in accordance with GAAP.  Other than as discussed in the following paragraph, the Company has no plans to withdraw from any of these agreements.

In November 2011, Rockford, ARB and Q3C, along with other members of the Pipe Line Contractors Association (“PLCA”), withdrew from the Central States Southeast and Southwest Areas Pension Fund multiemployer pension plan (the “Plan”).  In connection with the withdrawal, the Company recorded an estimated net liability and SG&A expense of $5,000 in 2011 based on information provided by the Plan.   In 2012, the Company increased the estimated withdrawal liability balance to $7,500, recording an SG&A expense of $2,500.  The Company withdrew from the Plan in order to mitigate its liability in connection with the Plan, which is significantly underfunded.  The Plan has asserted that the PLCA members did not affect a withdrawal in 2011, although the Company believes that a legally effective withdrawal occurred in November 2011 and has recorded the withdrawal liability on that basis.  If the Plan were to prevail in its assertion and the withdrawal of the Company were deemed to occur after 2011, the amount of any withdrawal liability would be expected to increase.

Employers are required to provide additional quantitative and qualitative disclosures for multiemployer plans under ASU 2011-09 issued by the FASB in September 2011.  During the last three years, the Company made annual contributions to 66 pension plans.   The Company was not listed in any of its plans’ Form 5500s as providing more than 5% of the plan’s total contributions.  Our participation in significant plans for the year ended December 31, 2012 and 2011 is outlined in the table below.  The “EIN/Pension Plan Number” column provides the Employer Identification Number (“EIN”) and the three digit plan number.  The zone status is based on the latest information that we received from the plan and is certified by the plan’s actuary.  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.  The “FIP/RP Status Pending/Implemented” column indicates plans for which a financial improvement plan (“FIP”) or a rehabilitation plan (“RP”) is either pending or has been implemented.  The “Surcharge Imposed” column includes plans in a red zone status that require a payment of a surcharge in excess or regular contributions.  The last column lists the expiration date of the collective bargaining agreement to which the plan is subject. The table follows:

	EIN/Pension Plan	Pension Protection Act Zone Status		FIP/RP Status	Surcharge	Collective Bargaining Agreement	Contributions of the Company
Pension Fund Name	Number	2012	2011	Pending/Implemented	Imposed	Expiration Date	2012		2011		2010
So Cal Pipetrades Trust Funds	51-6108443/001	Green as of January 1, 2011	Green as of January 1, 2010	No	No	6/30/2014	5,298		2,931		1,394
Laborers Pension Trust Fund for Northern California	94-6277608/001	Yellow as of June 1, 2012	Yellow as of June 1, 2011	Yes	No	6/30/2015	$	4,816	$	3,501	$	1,237
Construction Laborers Pension Trust for Southern California	43-6159056/001	Green as of January 1, 2011	Green as of January 1, 2010	No	No	6/30/2015	2,952		2,373		1,694
Central Pension Fund of the International Union of Operating Engineers and Participating Employers	36-6052390/001	Green as of February 1, 2011	Green as of February 1, 2010	No	No	5/31/2014	2,206		1,797		946
Laborers International Union of North America National (Industrial) Pension Fund	52-6074345/001	Red as of March 31, 2011	Red as of March 31, 2011	Yes	Yes (1)	5/31/2014	1,995		1,740		826
Pipeline Industry Benefit Fund	73-6146433/001	Green as of January 1, 2011	Green as of January 1, 2010	No	No	5/31/2014	1,747		1,793		1,110
Boilermaker-Blacksmith National Pension Trust	48-6168020/001	Yellow as of January 1, 2011	Yellow as of January 1, 2010	Yes	No	9/30/2014	1,502		1,035		469
Northern California Pipe Trades Pension Plan	94-3190386/002	Green as of January 1, 2011	Green as of January 1, 2010	No	No	4/30/2014	1,638		1,741		283
				Contributions for significant plans			$	22,154	$	16,911	$	7,959
				Contributions to other multiemployer plans			7,949		7,271		4,631
				Total contributions made			$	30,103	$	24,182	$	12,590

(1) Temporary surcharge of 5% of total contributions imposed during the period June 1, 2010 through December 31, 2010. Effective January 1, 2011, the surcharge was increased to 10% of total contributions. Under the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010, the plan adopted to amortize the fund’s 2008 investment losses over a 29 year period (rather than 15 years) and the 2008 investment losses will be recognized for funding purposes over a 10 year smoothing period (rather than 5 years). During this period, benefits cannot be increased.

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Noncontrolling Interests

12 Months Ended

Dec. 31, 2012

Noncontrolling Interests

Noncontrolling Interests

Note 13 — Noncontrolling Interests

The Company applies the provisions of ASC Topic 810-10-45, which establishes accounting and reporting standards for ownership interests of parties other than the Company in subsidiaries, such as joint ventures and partnerships,.

The Company determined that the Blythe joint venture was a variable interest entity (“VIE”) and that the Company was determined to be the primary beneficiary as a result of its significant influence over the joint venture operations. Revenues for the Blythe joint venture for the year ended December 31, 2012 were $25,769 and net income attributable to noncontrolling interests in the Blythe joint venture was $1,511.  Since Blythe is a partnership, no tax effect was recognized for the income.  There was no material operating activity for the project during the year ended December 31, 2011.  There were no distributions to noncontrolling interests and no capital contributions made by noncontrolling interests during the years ended December 31, 2012 or 2011.

At December 31, 2012, the carrying value of the assets and liabilities associated with the operations of the Blythe joint venture included $3,565 of cash, $8,843 of accounts receivable and current liabilities of $9,379.  As of December 31, 2011, the carrying value of the assets and liabilities associated with the Blythe joint venture was $2,546 and $2,540, respectively. The net assets of the joint venture are restricted for use by the project and are not available for general operations of the Company.

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Selected Quarterly Financial Information (Unaudited) (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended								12 Months Ended
	Dec. 31, 2012	Sep. 30, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2011	Sep. 30, 2011	Jun. 30, 2011	Mar. 31, 2011	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Selected Quarterly Financial Information (Unaudited)
Revenues	$ 480,883	$ 431,842	$ 337,436	$ 291,573	$ 373,066	$ 375,483	$ 351,956	$ 359,645	$ 1,541,734	$ 1,460,150	$ 941,765
Gross Profit	54,819	56,291	44,004	37,596	51,046	52,121	41,406	40,630	192,710	185,203	122,789
Net income	17,932	17,948	11,857	10,530					58,267	58,559	33,616
Net income attributable to Primoris	$ 17,021	$ 17,516	$ 11,733	$ 10,486	$ 12,471	$ 19,348	$ 14,462	$ 12,278	$ 56,756	$ 58,559	$ 33,616
Earnings per share attributable to Primoris:
Basic earnings per share (in dollars per share)	$ 0.33	$ 0.34	$ 0.23	$ 0.21	$ 0.24	$ 0.38	$ 0.28	$ 0.25	$ 1.10	$ 1.15	$ 0.79
Diluted earnings per share (in dollars per share)	$ 0.33	$ 0.34	$ 0.23	$ 0.20	$ 0.24	$ 0.38	$ 0.28	$ 0.24	$ 1.10	$ 1.14	$ 0.72
Weighted average shares outstanding
Basic (in shares)	51,404	51,398	51,435	51,096	51,059	51,054	51,044	49,675	51,391	50,707	42,694
Diluted (in shares)	51,418	51,404	51,435	51,337	51,292	51,054	51,154	51,051	51,406	51,153	46,878

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Intangible Assets

12 Months Ended

Dec. 31, 2012

Intangible Assets

Intangible Assets

Note 9—Intangible Assets

At December 31, 2012 and 2011, intangible assets totaled $51,978 and $32,021, respectively, net of amortization.   The December 31, 2012 balance includes the effect of four acquisitions during 2012 (See Note 4).  The table below summarizes the intangible asset categories, amounts and the average amortization periods which are generally on a straight-line basis, at December 31:

	Amortization		Amount
	Period		2012		2011
Tradename	3 and 10 years		$	23,586	$	18,791
Non-compete agreements	2 to 5 years		4,130		4,695
Customer relationships	5 to 15 years		24,212		8,181
Backlog	0.75 years		50		354
		Total	$	51,978	$	32,021

Amortization expense of intangible assets was $6,543, $9,699 and $6,580 for the years ended December 31, 2012, 2011 and 2010, respectively.  Estimated amortization expense for intangible assets as of December 31, 2012 is as follows:

For the Years Ending December 31,	Estimated Intangible Amortization Expense
2013	$	7,020
2014	6,986
2015	5,834
2016	5,330
2017	5,318
Thereafter	21,490
	$	51,978

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Accounts Receivable (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Accounts Receivable
Contracts receivable, net of allowance for doubtful accounts	$ 227,548	$ 166,298
Retention	39,710	20,378
Contracts receivable and retention	267,258	186,676
Other accounts receivable	837	702
Accounts receivable, net	268,095	187,378
Allowance for doubtful accounts	432	363
Contract revenues earned from related parties	$ 502	$ 5,681	$ 1,568

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Property and Equipment

12 Months Ended

Dec. 31, 2012

Property and Equipment

Property and Equipment

Note 7—Property and Equipment

The following is a summary of property and equipment at December 31:

	2012			2011			Useful Life
Land and buildings	$	24,358		$	18,987		30 years
Leasehold improvements	17,530			5,597			Lease life
Office equipment	2,092			1,203			3 - 5 years
Construction equipment	197,200			158,978			3 - 7 years
Transportation equipment	48,649			28,475			3 - 18 years
	289,829			213,240
Less: accumulated depreciation and amortization	(104,989		)	(83,591		)
Net property and equipment	$	184,840		$	129,649

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Equity Method Investments

12 Months Ended

Dec. 31, 2012

Equity Method Investments

Equity Method Investments

Note 8—Equity Method Investments

WesPac Energy LLC

On July 1, 2010, the Company acquired a 50% membership interest in WesPac Energy LLC, a Nevada limited liability company (“WesPac”), from Kealine Holdings, LLC (“Kealine”), a Nevada limited liability company.  Kealine holds the remaining 50% membership interest in WesPac.  We have no future obligation to make any additional investments into WesPac. All key investment, management and operating decisions of WesPac require unanimous approval from a management committee equally represented by Kealine and us.  The Company believes the ownership interest in WesPac will broaden our exposure to a variety of pipeline, terminal and energy-related infrastructure opportunities across North America.

The following is a summary of the financial position and results as of and for the period ended December 31:

	2012			2011
WesPac Energy, LLC
Balance sheet data:
Assets	$	16,896		$	20,147
Liabilities	1,063			1,820
Net assets	$	15,833		$	18,327
Company’s equity investment in affiliate	$	11,463		$	12,415
Earnings data:
Revenue	$	552		$	1,717
Expenses	2,455			9,303
Earnings before taxes	$	(1,903	)	$	(7,586	)
Company’s equity in earnings	$	(952	)	$	(3,793	)

In December 2012, WesPac expensed $1,100 for three abandoned projects and the Company recorded its 50% share of the expense.

At the end of 2011, a major oil refining third party terminated two potential projects.  WesPac expensed $5,400 in 2011.  In December 2011, the Company recorded its 50% share of expenses required by the equity method of accounting and reduced its $5,000 basis difference by $1,700 to recognize an estimate for an other than temporary decrease in the value of its basis difference between the Company’s original investment and its pro-rata share of the WesPac equity.

St. — Bernard Levee Partners

The Company acquired a 30% interest in St. — Bernard Levee Partners (“Bernard”) in the fourth quarter 2009 and accounts for this investment under the equity method.  Bernard engages in construction activities in Louisiana. Bernard distributed $4,200 and $36,955 to its equity holders during the twelve months ended December 31, 2012 and 2011, respectively, of which the Company’s share, as calculated under the joint venture agreement, was $1,260 and $10,022 for the same periods in 2012 and 2011, respectively.  The following is a summary of the financial position and results as of and for the years ended December 31:

	2012		2011
St. Bernard Levee Partners
Balance sheet data:
Assets	$	592	$	5,677
Liabilities	86		4,771
Net assets	$	506	$	906
Company’s equity investment in affiliate	$	150	$	272
Earnings data:
Revenue	$	4,026	$	72,822
Expenses	227		39,650
Earnings before taxes	$	3,799	$	33,172
Company’s equity in earnings	$	1,138	$	9,415

Alvah, Inc.

On November 17, 2012, the Company acquired a 49% membership interest in Alvah, Inc., a California corporation (“Alvah”), as part of the acquisition of Q3 Contracting, Inc.  Alvah is engaged in electrical contracting activities, primarily in Northern California and worked as a subcontractor for ARB prior to and after the acquisition. In December 2012, Alvah distributed $200, of which the Company’s share was $98.  During 2012, payments made to Alvah as a subcontractor by ARB and Q3C amounted to $6,377 and $537, respectively.

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Accounts Payable and Accrued Liabilities

12 Months Ended

Dec. 31, 2012

Accounts Payable and Accrued Liabilities

Accounts Payable and Accrued Liabilities

Note 10—Accounts Payable and Accrued Liabilities

At December 31, 2012 and 2011, accounts payable includes retention amounts of approximately $15,946 and $13,980, respectively.  These amounts due to subcontractors have been retained pending contract completion and customer acceptance of jobs.

The following is a summary of accrued expenses and other current liabilities at December 31:

	2012		2011
Payroll and related employee benefits	$	33,086	$	29,110
Insurance, including self-insurance reserves	22,982		18,732
Reserve for estimated losses on uncompleted contracts	764		917
Corporate income taxes and other taxes	3,779		1,546
Accrued overhead cost	2,007		1,819
Current liabilities of discontinued operations	133		733
Other	13,401		7,066
	$	76,152	$	59,923

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Intangible Assets (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012 item	Dec. 31, 2011	Dec. 31, 2010
Intangible assets
Intangible assets, net	$ 51,978	$ 32,021
Amortization expense of intangible assets	6,543	9,699	6,580
Number of acquisitions in 2012	4
Estimated future amortization expense for intangible assets
2013	7,020
2014	6,986
2015	5,834
2016	5,330
2017	5,318
Thereafter	21,490
Total	51,978	32,021
Tradename
Intangible assets
Intangible assets, net	23,586	18,791
Estimated future amortization expense for intangible assets
Total	23,586	18,791
Tradename | Minimum
Intangible assets
Amortization Period	3 years
Tradename | Maximum
Intangible assets
Amortization Period	10 years
Non-compete agreements
Intangible assets
Intangible assets, net	4,130	4,695
Estimated future amortization expense for intangible assets
Total	4,130	4,695
Non-compete agreements | Minimum
Intangible assets
Amortization Period	2 years
Non-compete agreements | Maximum
Intangible assets
Amortization Period	5 years
Customer relationship
Intangible assets
Intangible assets, net	24,212	8,181
Estimated future amortization expense for intangible assets
Total	24,212	8,181
Customer relationship | Minimum
Intangible assets
Amortization Period	5 years
Customer relationship | Maximum
Intangible assets
Amortization Period	15 years
Backlog
Intangible assets
Amortization Period	9 months
Intangible assets, net	50	354
Estimated future amortization expense for intangible assets
Total	$ 50	$ 354

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Capital Leases (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Dec. 31, 2011	Nov. 12, 2010 Rockford	Nov. 12, 2010 Rockford Vehicles and equipment
Capital leases
Fair value of assets acquired			$ 24,107	$ 12,501
Net book value of assets under capital leases	10,382	12,304
Future minimum lease payments required under capital leases
2013	3,921
2014	2,736
2015	1,141
2016	105
Total minimum lease payments	7,903
Amounts representing interest	(339)
Net present value of minimum lease payments	7,564
Less: current portion of capital lease obligations	(3,733)	(6,623)
Long-term capital lease obligations	$ 3,831	$ 4,047

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Equity Method Investments (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended							12 Months Ended			12 Months Ended		12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2012 WesPac item	Dec. 31, 2011 WesPac item	Jul. 01, 2010 WesPac	Jul. 01, 2010 WesPac Kealine	Dec. 31, 2012 Bernard	Dec. 31, 2011 Bernard	Dec. 31, 2009 Bernard	Dec. 31, 2012 Alvah, Inc.	Nov. 17, 2012 Alvah, Inc.	Dec. 31, 2012 Alvah, Inc. ARB	Dec. 31, 2012 Alvah, Inc. Q3C
Equity method investments
Membership interest (as a percent)						50.00%	50.00%			30.00%		49.00%
Balance sheet data
Assets				$ 16,896	$ 20,147			$ 592	$ 5,677
Liabilities				1,063	1,820			86	4,771
Net assets				15,833	18,327			506	906
Company's equity investment	12,813	12,687		11,463	12,415			150	272
Earnings data:
Revenue				552	1,717			4,026	72,822
Expenses				2,455	9,303			227	39,650
Earnings before taxes				(1,903)	(7,586)			3,799	33,172
Company's equity in earnings	186	4,018	4,630	(952)	(3,793)			1,138	9,415
Number of potential projects terminated by major oil refining third party					2
Amount expensed				1,100	5,400
Number of projects abandoned				3
Share of expenses recorded by the entity (as a percent)				50.00%	50.00%
Reduction recorded to recognize an estimate for an other than temporary decrease					1,700
Basis difference between the entity's original investment and its pro-rata share of the investee equity prior to any impairment adjustment					5,000
Amount distributed								4,200	36,955		200
Share in distribution	1,358	10,136	9,491					1,260	10,022		98
Subcontractor payments made to equity method investee													$ 6,377	$ 537

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Business Combinations (Tables)

12 Months Ended

Dec. 31, 2012

Asset purchase agreement

Summary of the fair value of assets acquired and the liabilities assumed

	2012												2010
	Sprint			Silva			Saxon			Q3C			Rockford
	Acquisition			Acquisition			Acquisition			Acquisition			Acquisition
Cash	$	—		$	—		$	—		$	—		$	19,623
Accounts receivable	7,614			903			2161			17,947			57,505
Cost and earnings in excess of billings	601			23			279			4,358			2,132
Inventory and other assets	252			353			564			131			—
Investment in non-consolidated entities	—			—			—			1,298			—
Deferred tax assets	—			—			—			—			3,383
Prepaid expenses	—			—			—			174			813
Property, plant and equipment	12,078			14,675			2,948			20,526			24,107
Other assets	—			—			—			—			2,400
Intangible assets	3,600			—			1350			21,550			15,510
Goodwill	9,389			—			810			12,562			32,079
Accounts payable	(1,458		)	(1,450		)	(2,952		)	(4,448		)	(14,525		)
Billing in excess of costs and earnings	—			(414		)	(110		)	—			(35,408		)
Accrued expenses	(716		)	—			(121		)	(7,851		)	(13,324		)
Notes payable	—			—			—			(10,253		)	(4,684		)
Capital lease liabilities	(2,983		)	—			—			—			—
Deferred tax liability	—			—			—			—			(9,988		)
Total	$	28,377		$	14,090		$	4,929		$	55,994		$	79,623

Schedule of the acquired intangible assets categories, fair value and average amortization periods

		2012 Fair Value						2010 Fair Value
	Amortization	Sprint		Saxon		Q3C		Rockford
	Period	Acquisition		Acquisition		Acquisition		Acquisition
Tradename	3 & 10 years	$	700	$	—	$	6,650	$	7,450
Non-compete agreements	2 to 5 years	450		100		450		2,100
Customer relationships	5 to 15 years	2,450		1,150		14,450		2,750
Backlog	0.75 years	—		100		—		3,210
Total		$	3,600	$	1,350	$	21,550	$	15,510

Schedule of pro forma results

	2012		2011
	(unaudited)		(unaudited)
Revenues	$	1,673,001	$	1,674,406
Income before provision for income taxes	$	95,254	$	90,799
Net income attributable to Primoris	$	58,678	$	54,940
Weighted average common shares outstanding:
Basic — (1)	51,403		50,769
Diluted — (1)	51,418		51,215
Earnings per share attributable to Primoris:
Basic	$	1.14	$	1.08
Diluted	$	1.14	$	1.07

Sprint

Asset purchase agreement

Schedule of fair value of the consideration transferred to selling shareholders

Cash consideration	$	21,197
Company common stock	980
Earnout consideration	6,200
Total consideration	$	28,377

Rockford

Asset purchase agreement

Schedule of fair value of the consideration transferred to selling shareholders

Cash	$	35,039
Company common stock	13,600
Subordinated promissory note	16,712
Earnout consideration	14,272
Total fair value of consideration	$	79,623

Q3 Contracting

Asset purchase agreement

Schedule of fair value of the consideration transferred to selling shareholders

Cash consideration	$	48,116
Commitment to issue Company common stock	430
Earnout consideration	7,448
Total consideration	$	55,994

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Summary of Significant Accounting Policies (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2010	Dec. 31, 2011
Short term investments
Term of certificates of deposits, minimum	4 months
Term of certificates of deposits, maximum	6 months
Goodwill and other intangible assets
Impairment charge		$ 1,732
Goodwill and other intangible assets
Goodwill	116,941		94,179
East Construction Services
Goodwill and other intangible assets
Goodwill	69,859		59,659
West Construction Services
Goodwill and other intangible assets
Goodwill	44,641		32,079
Engineering
Goodwill and other intangible assets
Goodwill	2,441		2,441
James Construction Group | East Construction Services
Goodwill and other intangible assets
Goodwill	59,259
Rockford | West Construction Services
Goodwill and other intangible assets
Goodwill	32,079
Q3C Contracting, Inc | West Construction Services
Goodwill and other intangible assets
Goodwill	12,562
Sprint | East Construction Services
Goodwill and other intangible assets
Goodwill	9,389
Born Canada | Engineering
Goodwill and other intangible assets
Goodwill	2,441
Saxon Group | East Construction Services
Goodwill and other intangible assets
Goodwill	810
Cardinal Contractors | East Construction Services
Goodwill and other intangible assets
Goodwill	$ 401

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Reportable Operating Segments

12 Months Ended

Dec. 31, 2012

Reportable Operating Segments

Reportable Operating Segments

Note 15—Reportable Operating Segments

The Company segregates the business into three operating segments: the East Construction Services segment, the West Construction Services segment and the Engineering segment.

Range of Services — East and West Construction Services

Both the East Construction Services and the West Construction Services segments specialize in a range of services that include designing, building/installing, replacing, repairing/rehabilitating and providing management services for construction related projects. Our services include:

· Providing installation of underground pipeline, cable and conduits for entities in the petroleum, petrochemical and water industries;

· Providing installation and maintenance of industrial facilities for entities in the petroleum, petrochemical and water industries;

· Providing installation of complex commercial and industrial cast-in-place structures; and

· Providing construction of highways, industrial and environmental construction.

East Construction Services

The East Construction Services segment includes the JCG construction business, located primarily in the southeastern United States and the businesses located in the Gulf Coast region of the United States, including Cardinal Contractors, Inc.  The segment also includes the operating results relating to the acquisition of Sprint Pipeline Services on March 12, 2012, Silva on May 30, 2012 and Saxon on September 28, 2012.

West Construction Services

The West Construction Services segment includes the construction services performed by ARB, ARB Structures, Inc., Rockford, Alaska Continental Pipeline, Inc., All Day Electric Company, Inc., Primoris Renewables, Inc. Juniper Rock, Inc. and Stellaris, LLC.  Most of the entities perform work primarily in California.  Rockford operates throughout the United States.  The Segment also includes the operating results relating to the acquisition of Q3C on November 17, 2012, with operations in the upper Midwest United States.  The Blythe Power Constructors joint venture is also included as part of the segment.

Engineering

The Engineering segment includes the results of OnQuest, Inc. and Born Heaters Canada, ULC.  The Engineering group specializes in designing, supplying, and installing high-performance furnaces, heaters, burner management systems, and related combustion and process technologies for clients in the oil refining, petrochemical, and power generation industries. It furnishes turnkey project management with technical expertise and the ability to deliver custom engineering solutions worldwide.

All intersegment revenues and gross profit, which were immaterial, have been eliminated in the following tables.

Segment Revenues

Revenue by segment for the years ended December 31, 2012, 2011 and 2010 was as follows:

	Year Ended December 31,
	2012				2011				2010
Business Segment	Revenue		% of Segment Revenue		Revenue		% of Segment Revenue		Revenue		% of Segment Revenue
East Construction Services	$	662,248	43.0	%	$	528,745	36.2	%	$	480,533	51.0	%
West Construction Services	832,860		54.0	%	881,733		60.4	%	402,273		42.7	%
Engineering	46,626		3.0	%	49,672		3.4	%	58,959		6.3	%
Total	$	1,541,734	100.0	%	$	1,460,150	100.0	%	$	941,765	100.0	%

Segment Gross Profit

Gross profit by segment for the years ended December 31, 2012, 2011 and 2010 was as follows:

	Year Ended December 31,
	2012				2011				2010
Business Segment	Gross Profit		% of Segment Revenue		Gross Profit		% of Segment Revenue		Gross Profit		% of Segment Revenue
East Construction Services	$	63,811	9.6	%	$	57,118	10.8	%	$	48,770	10.1	%
West Construction Services	119,328		14.3	%	118,385		13.4	%	61,897		15.4	%
Engineering	9,571		20.5	%	9,700		19.5	%	12,122		20.6	%
Total	$	192,710	12.5	%	$	185,203	12.7	%	$	122,789	13.0	%

Segment Goodwill

The amount of goodwill recorded by segment at December 31, 2012 and 2011 was as follows:

Segment	2012		2011
East Construction Services	$	69,859	$	59,659
West Construction Services	44,641		32,079
Engineering	2,441		2,441
Total	$	116,941	$	94,179

Geographic Region — Revenues and Total Assets

Revenue and total asset by geographic area for the years ended December 31, 2012, 2011 and 2010 was as follows:

	External Revenues												Total Assets
	Year Ended December 31,												At December 31,
	2012				2011				2010				2012		2011
Country	Revenue		% of Revenue		Revenue		% of Revenue		Revenue		% of Revenue
United States	$	1,530,819	99.3	%	$	1,447,863	99.2	%	$	920,051	97.7	%	$	920,872	$	719,028
Non-United States	10,915		0.7	%	12,287		0.8	%	21,714		2.3	%	10,335		9,385
Total	$	1,541,734	100.0	%	$	1,460,150	100.0	%	$	941,765	100.0	%	$	931,207	$	728,413

All non-United States revenue was generated in the Engineering Segment.  For the table above, revenues generated by OnQuest’s Canadian subsidiary, Born Heaters Canada, ULC, were used to estimate non-United States revenues.

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Related Party Transactions

12 Months Ended

Dec. 31, 2012

Related Party Transactions

Related Party Transactions

Note 20—Related Party Transactions

Primoris has entered into various leasing transactions with Stockdale Investment Group, Inc. (“SIGI”).  Brian Pratt, our Chief Executive Officer, President and Chairman of the Board of Directors and our largest stockholder, holds a majority interest and is the chairman, president and chief executive officer and a director of SIGI.  John M. Perisich, our Senior Vice President and General Counsel, is secretary of SIGI.

Primoris leases properties located in Bakersfield (lease expires in October 31, 2015), Pittsburg (lease expires September 30, 2014) and San Dimas in California (lease expires March 30, 2019), and in Pasadena, Texas (leases expire in July 2019 and 2021) from SIGI.  During the years ended December 31, 2012, 2011 and 2010, the Company paid $929, $910 and $892, respectively, in lease payments to SIGI for the use of these properties.

The Company entered into a $6,100 agreement in 2010 to construct a wastewater facility for Pluris, LLC, a private company in which Brian Pratt also holds a majority interest. The transaction was reviewed and approved by the Audit Committee of the Board of Directors of the Company.  The project was substantially completed in December 2011 and the Company recognized revenues of $362 and $5,680 in 2012 and 2011, respectively at normal margins.

Primoris leases a property from Roger Newnham, one of our stockholders and a manager of our subsidiary Born Heaters Canada. The property is located in Calgary, Canada. During the years ended December 31, 2012, 2011 and 2010 Primoris paid $292, $277 and $252, respectively, in lease payments to Mr. Newnham for the use of this property. The term of the lease is through December 31, 2014.

Primoris leases a property from Lemmie Rockford, one of our stockholders, which commenced November 1, 2011.  The property is located in Toledo, Washington.  During the year ended December 31, 2012 and 2011, Primoris paid $90 and $90, respectively, in lease payments to Mr. Rockford for the use of this property.  The lease expires on January 15, 2015.

As a result of the November 2012 acquisition of Q3C, the Company became party to leased property from Quality RE Partners, owned by three of the Q3C selling shareholders, of whom two are current employees, including Jay Osborn, President of Q3C.  The lease commenced October 28, 2012.  The property is located in Little Canada, Minnesota.  During the year ended December 31, 2012, the Company paid $31, in lease payments to Quality RE Partners for the use of this property.  The lease expires on October 27, 2022.

The Company owns several non-consolidated investments and has recognized revenues on work performed for those joint ventures.  The Company recognized $0, $0 and $83 in related party revenues during the years ended December 31, 2012, 2011 and 2010, respectively, on the OMPP joint venture.  The Company also recognized $0, $0 and $472 in related party revenues for the years ended December 31, 2012, 2011 and 2010, respectively, from the St. - Bernard Levee Partners joint venture.  On November 17, 2012, the Company acquired a 49% interest in Alvah, Inc. as part of the Q3C acquisition.  During 2012, payments made to Alvah as a subcontractor by ARB and Q3C amounted to $6,377 and $537, respectively.  See Note 8— “Equity Method Investments”.

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Selected Quarterly Financial Information (Unaudited) (Tables)

12 Months Ended

Dec. 31, 2012

Selected Quarterly Financial Information (Unaudited)

Schedule of selected unaudited quarterly consolidated financial information

	Year Ended December 31, 2012
(In thousands, except per share data)	1st Quarter		2nd Quarter		3rd Quarter		4th Quarter
Revenues	$	291,573	$	337,436	$	431,842	$	480,883
Gross profit	37,596		44,004		56,291		54,819
Net income	10,530		11,857		17,948		17,932
Net income attributable to Primoris	10,486		11,733		17,516		17,021
Earnings per share:
Basic earnings per share	$	0.21	$	0.23	$	0.34	$	0.33
Diluted earnings per share	$	0.20	$	0.23	$	0.34	$	0.33
Weighted average shares outstanding
Basic	51,096		51,435		51,398		51,404
Diluted	51,337		51,435		51,404		51,418

	Year Ended December 31, 2011
(In thousands, except per share data)	1st Quarter		2nd Quarter		3rd Quarter		4th Quarter
Revenues	$	359,645	$	351,956	$	375,483	$	373,066
Gross profit	40,630		41,406		52,121		51,046
Net income	12,278		14,462		19,348		12,471
Earnings per share:
Basic earnings per share	$	0.25	$	0.28	$	0.38	$	0.24
Diluted earnings per share	$	0.24	$	0.28	$	0.38	$	0.24
Weighted average shares outstanding
Basic	49,675		51,044		51,054		51,059
Diluted	51,051		51,154		51,054		51,292

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Capital Leases (Tables)

12 Months Ended

Dec. 31, 2012

Capital Leases

Schedule of future minimum lease payments required under capital leases together with their present value

2013	$	3,921
2014	2,736
2015	1,141
2016	105
Total minimum lease payments	$	7,903
Amounts representing interest	(339		)
Net present value of minimum lease payments	7,564
Less: current portion of capital lease obligations	(3,733		)
Long-term capital lease obligations	$	3,831

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CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (USD $) In Thousands, except Share data, unless otherwise specified	Total USD ($)	Common Stock USD ($)	Preferred Stock	Additional Paid-in Capital USD ($)	Retained Earnings USD ($)	Non Controlling Interest USD ($)	Accumulated Other Comprehensive Income USD ($)
Balance at Dec. 31, 2009	$ 143,959	$ 3		$ 100,644	$ 42,982		$ 330
Balance (in shares) at Dec. 31, 2009		32,704,903.00	81,852.78
Increase (Decrease) in Stockholders' Equity Roll Forward
Net income	33,616				33,616
Issuance of earnout shares to James Construction Group/Rockford sellers	13,600			13,600
Issuance of earnout shares to James Construction Group/Rockford sellers (in shares)		1,605,709
Issuance of common shares to Former Primoris owners (in shares)		2,499,975
Stock issued for the purchase of Cravens Services, Inc.	600			600
Stock issued for the purchase of Cravens Services, Inc. (in shares)		74,906
Warrant exercises	21,689	1		21,688
Warrant exercises (in shares)		4,337,909
Dividends - common	(4,413)				(4,413)
Dividends - preferred	(204)				(204)
Conversion of James Construction Group preferred to common shares	1	1
Conversion of James Construction Group preferred to common shares (in shares)		8,185,278.00	(81,852.78)
Stock to foreign managers	390			390
Buyback of warrants	(277)			(277)
Foreign currency hedge effect	(330)						(330)
Cancelled shares for sale of foreign subsidiary	(400)			(400)
Cancelled shares for sale of foreign subsidiary (in shares)		(49,080)
Balance at Dec. 31, 2010	208,231	5		136,245	71,981
Balance (in shares) at Dec. 31, 2010		49,359,600.00
Increase (Decrease) in Stockholders' Equity Roll Forward
Net income	58,559				58,559
Issuance of earnout shares to James Construction Group/Rockford sellers	14,800			14,800
Issuance of earnout shares to James Construction Group/Rockford sellers (in shares)		1,589,741
Issuance of shares to employees and directors	988			988
Issuance of shares to employees and directors (in shares)		109,791
Dividends - common	(5,616)				(5,616)
Purchase of units from EarlyBirdCapital	(2,030)			(2,030)
Balance at Dec. 31, 2011	274,932	5		150,003	124,924
Balance (in shares) at Dec. 31, 2011		51,059,132.00
Increase (Decrease) in Stockholders' Equity Roll Forward
Net income	58,267				56,756	1,511
Issuance of shares to sellers of Sprint	980			980
Issuance of shares to sellers of Sprint (in shares)		62,052
Issuance of earnout shares to James Construction Group/Rockford sellers	3,450			3,450
Issuance of earnout shares to James Construction Group/Rockford sellers (in shares)		232,637
Issuance of shares to employees and directors	2,173			2,173
Issuance of shares to employees and directors (in shares)		139,465
Dividends - common	(6,163)				(6,163)
Repurchase of stock	(1,001)			(1,001)
Repurchase of stock (in shares)		(89,600)
Balance at Dec. 31, 2012	$ 332,638	$ 5		$ 155,605	$ 175,517	$ 1,511
Balance (in shares) at Dec. 31, 2012		51,403,686.00

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Business Combinations

12 Months Ended

Dec. 31, 2012

Business Combinations

Business Combinations

Note 4—Business Combinations

2012 Acquisition — Sprint Pipeline Services, L.P.

On March 12, 2012, the Company executed an asset purchase agreement with Sprint Pipeline Services, L.P. (“Sprint”).  Headquartered in Pearland (outside Houston), Texas, Sprint provides a comprehensive range of pipeline construction, maintenance, upgrade, fabrication and specialty services primarily in the southeastern United States.  The Company formed PES to make the acquisition.  The purchase agreement allows the Company to use the Sprint name for three years.  For 2012, Sprint contributed revenues of $92,470 and gross profit of $15,614 and have been included in the Company’s consolidated financial statements.

The fair value of the consideration transferred to selling shareholders consisted of the following:

Cash consideration	$	21,197
Company common stock	980
Earnout consideration	6,200
Total consideration	$	28,377

On the closing date, we paid the sellers $19,228 in cash and in the second quarter paid an additional $1,969 once a final valuation of the net book value of assets purchased was completed.

We issued the sellers 62,052 unregistered shares of our common stock with a contractually agreed upon value of $1,000 based on the average closing price of our common stock for the 20 business days prior to the closing date.  The fair value of the stock issued was $980 based on the stock price on the closing date.

Acquisition costs related to the Sprint acquisition of $94 were expensed in the year ended December 31, 2012.

Sprint Earnout Consideration

As part of the acquisition, the Company agreed to issue additional cash to the sellers, contingent upon Sprint meeting certain operating performance targets for the remainder of 2012 and for the twelve months ending December 31, 2013.

If income before interest, taxes, depreciation and amortization (“EBITDA”) for 2012, as defined in the stock purchase agreement, was at least $7,000, we agreed to pay $4,000 in cash to the sellers.  The estimated fair value of the 2012 contingent consideration was $3,455 on the acquisition date.

The Company determined that the 2012 earnout target was achieved and recorded the full value of the $4,000 liability on the balance sheet at December 31, 2012.  As a result, a charge of $200 was recorded in Selling, General and Administration expense in 2012.  In March 2013, the liability should be settled by making a $4,000 cash payment to the sellers.

The 2013 earnout target provides for an additional cash payment of $4,000 to the sellers if 2013 EBITDA is at least $7,750.  The estimated fair value of the 2013 potential contingent consideration as of the acquisition date was $2,745 and at December 31, 2012, the estimated fair value was $3,020.

2012 Acquisition — Silva Companies

On May 30, 2012, JCG executed an asset purchase agreement with Silva Contracting Company, Inc., Tarmac Materials, LLC and C3 Interests, LLC (collectively, “Silva”).  Based outside of Houston, Texas, Silva provides transportation infrastructure maintenance, asphalt paving and material sales in the Gulf Coast region of the United States.  On the closing date, we paid the sellers $13,934 and paid an additional $156 in December 2012.   After the acquisition, the operations for Silva were merged into JCG.  Acquisition costs related to the Silva acquisition of $93 were expensed in the year ended December 31, 2012

2012 Acquisition — The Saxon Group

On September 28, 2012, PES executed an asset purchase agreement with The Saxon Group (“Saxon”).  Based in Suwannee, Georgia, outside of Atlanta, Saxon is a full service industrial construction enterprise with special expertise in the industrial gas processing and power plant sectors.  We paid the sellers $550 in cash and paid off an outstanding note for $2,429 on behalf of Saxon, a total cash payment of $2,979.  For 2012, Saxon has contributed revenues of $7,460 and a gross margin loss of $46 and have been included in the Company’s consolidated financial statements.

Acquisition costs related to the Saxon acquisition of $14 were expensed in the year ended December 31, 2012.

Saxon Earnout Consideration

As part of the acquisition, the Company agreed to issue additional cash of $2,500 to the sellers, contingent upon Saxon meeting certain operating performance targets.  The Company agreed to pay $2,500 in cash to the sellers if they achieve one of the following two targets:  (1) EBITDA for the fifteen month period ending December 31, 2013 of at least $4,000 or; (2) EBITDA for the twenty-one month period ending June 30, 2014 of at least $4,750.  The estimated fair value of the potential contingent consideration on the acquisition date was $1,950 and at December 31, 2012, the estimated fair value was $2,028.

2012 Acquisition — Q3 Contracting

On November 17, 2012, the Company purchased all of the issued and outstanding shares of stock of Q3C, a privately-held Minnesota corporation.  The sellers elected to treat the acquisition under Section 338(h)(10) of the Internal Revenue Code which allows the Company to account for the transaction as an asset purchase.  Based in Little Canada, Minnesota, north of St. Paul, Minnesota, Q3C specializes in small diameter pipeline and gas distribution construction and other services, primarily in the upper Midwest region of the United States.  For 2012, Q3C has contributed revenues of $12,755 and gross profit of $1,408 and have been included in the Company’s consolidated financial statements.

The fair value of the consideration transferred to selling shareholders consisted of the following:

Cash consideration	$	48,116
Commitment to issue Company common stock	430
Earnout consideration	7,448
Total consideration	$	55,994

On the closing date, we paid the sellers $48,116 in cash.  The Company also agreed to issue $430 of Company common stock, to be valued based on the average December 2012 closing price.  An adjustment for the fair value of the stock at December 31, 2012 was not material.  The Company issued 29,273 shares of unregistered common stock in February 2013.

Q3C Earnout Consideration

As part of the acquisition, the Company agreed to issue additional cash to the sellers, contingent upon Q3C meeting certain operating performance targets.  The targets are based on the achievement of meeting certain levels of Q3C’s EBITDA, as that term is defined in the stock purchase agreement.  The targets are as follows:

1. If EBITDA for the period November 18, 2012 through December 31, 2013 is at least $17,700, the Company agreed to pay $3,750 in cash to the sellers, with an additional cash payment of $1,250 if EBITDA exceeds $19,000.

2. If EBITDA for the calendar year 2014 is at least $19,000, the Company agreed to pay $3,750 in cash to the sellers, with an additional cash payment of $1,250 if EBITDA exceeds $22,000.

The fair value of the contingent consideration was estimated to be $7,450 as of the purchase date and is included on the Company’s balance sheet as a liability.  The fair value is based on management’s evaluation of the probability of Q3C meeting the EBITDA targets for the two periods, discounted at the Company’s estimated average cost of capital.  The estimated fair value at December 31, 2012 was $7,490.

Acquisition costs related to the Q3C acquisition of $129 were expensed in the year ended December 31, 2012.

2010 Acquisition - Rockford Holdings Corporation

On November 8, 2010, the Company entered into a stock purchase agreement to acquire the stock of privately-held Rockford Corporation (“Rockford”).  Upon completion of the acquisition on November 12, 2010, Rockford became a wholly-owned subsidiary.  Based in Hillsboro (Portland), Oregon, Rockford specializes in construction of large diameter natural gas and liquid pipeline projects and related facilities.

Rockford’s results of operations and estimated fair value of assets acquired and liabilities assumed have been included in the Company’s consolidated financial statements from November 1, 2010.  While November 12, 2010 was considered the acquisition date, the net change between November 1, 2010 and the acquisition date was not material.  For the period November 1, 2010 to December 31, 2010 Rockford revenues were $85,309, income before provision for income taxes of $8,218 and net income was $4,962.  Acquisition costs related to the acquisition of $360 were expensed in the year ended December 31, 2010.

Rockford Merger Consideration

The fair value of the consideration provided to the sellers as of the acquisition date of November 12, 2010 consisted of the following:

Cash	$	35,039
Company common stock	13,600
Subordinated promissory note	16,712
Earnout consideration	14,272
Total fair value of consideration	$	79,623

Details of the consideration follow:

Cash — On the closing date, the Company paid the sellers $35,039 in cash with $400 of the cash placed in an escrow account (the “Escrow Account”).  At December 31, 2012, the amount remained in the Escrow Account, pending final resolution of a dispute, as described below.

Company Stock —The Company issued the sellers shares of unregistered common stock with a value of $12,476.  The shares were based on an average closing price of our common stock for the 20 business days prior to the closing date.  We issued to the sellers 1,605,709 shares of common stock based on a contractually calculated value of $7.77 per share, with a fair value of $13,600 based on the stock price on the closing date.

Subordinated Promissory Note — The Company entered into an unsecured promissory note in favor of the sellers (the “Rockford Note”) with a principal amount of $16,712.  The principal amount of the Rockford Note was divided into two portions.  Approximately $9,669 on the Rockford Note was designated as “Note A” and approximately $7,043 of the Rockford Note was designated as “Note B.”  Note B was paid in full on March 10, 2011.  On the date of acquisition, management believed the face amount of the Rockford Note approximated fair value.

Note A is due and payable on October 31, 2013 and bears interest at different rates until maturity.  As a result of a dispute related to a certain liability at the time of the closing of the transaction and as provided for under the terms of the purchase agreement, the Company placed $5,000 in an interest bearing escrow account in lieu of making future payments of that amount to the note holders.  The Company included this escrow amount on its December 31, 2012 and 2011 balance sheet as “customer retention deposits and restricted cash”.

The Company ceased further principal and interest payments in May 2012, when the outstanding balance reached $5,000.  The balance was reclassified on the Company’s balance sheet from notes payable to accrued liabilities in September 2012.  In December 2012, the parties came to a resolution whereby the Company would pay $1,500 to the subordinated note holders out of the Escrow Account, the remaining to be remitted to the Company.  As a result, the Company reduced its liability to $1,500 and recorded $3,500 as a reduction of SG&A expense and reversed the accrued interest $400.  Final payment from the Escrow Account is expected to be made in the first quarter 2013.

Rockford Earnout Consideration

As part of the acquisition, the Company agreed to issue additional cash and common stock to the sellers, contingent upon Rockford meeting certain operating performance targets for the fourth quarter 2010, for the five quarters ending December 31, 2011 and for the year ended December 31, 2012.  The maximum amount of this consideration was $18,400 which when measured on a fair value basis as of the acquisition date, was estimated at $14,300 and was classified as a liability in the Company’s consolidated balance sheet.

The 2010 earnout target for the fourth quarter 2010 was achieved, and in March 2011, the Company issued 494,095 unregistered shares of common stock to the sellers.

The 2011 earnout target was achieved and the liability as of December 31, 2011 was $6,900.  In April 2012, the Company issued 232,637 unregistered shares of common stock to the sellers and made a cash payment of $3,450.

The final contingent earnout liability for 2012 was based on Rockford’s 2012 financial performance.  At December 31, 2011, the fair value of the liability reflected on the balance sheet was $5,818 and the fair value was adjusted quarterly during 2012.  In the fourth quarter 2012, the Company determined that the 2012 earnout target was achieved and recorded the full $6,900 liability at December 31, 2012.  As a result, an additional charge of $345 was recorded in Selling, General and Administration expense in 2012.  In March 2013, the Company anticipates making the $6,900 cash payment to the sellers.

Schedule of Assets Acquired and Liabilities Assumed for 2012 and 2010 Acquisitions

The 2012 acquisitions of Sprint, Silva, Saxon and Q3C and the 2010 acquisition of Rockford are accounted for under the acquisition method of accounting. Accordingly, assets acquired and liabilities assumed were measured at their estimated fair value at the acquisition date.

The following table summarizes the fair value of the assets acquired and the liabilities assumed:

	2012												2010
	Sprint			Silva			Saxon			Q3C			Rockford
	Acquisition			Acquisition			Acquisition			Acquisition			Acquisition
Cash	$	—		$	—		$	—		$	—		$	19,623
Accounts receivable	7,614			903			2161			17,947			57,505
Cost and earnings in excess of billings	601			23			279			4,358			2,132
Inventory and other assets	252			353			564			131			—
Investment in non-consolidated entities	—			—			—			1,298			—
Deferred tax assets	—			—			—			—			3,383
Prepaid expenses	—			—			—			174			813
Property, plant and equipment	12,078			14,675			2,948			20,526			24,107
Other assets	—			—			—			—			2,400
Intangible assets	3,600			—			1350			21,550			15,510
Goodwill	9,389			—			810			12,562			32,079
Accounts payable	(1,458		)	(1,450		)	(2,952		)	(4,448		)	(14,525		)
Billing in excess of costs and earnings	—			(414		)	(110		)	—			(35,408		)
Accrued expenses	(716		)	—			(121		)	(7,851		)	(13,324		)
Notes payable	—			—			—			(10,253		)	(4,684		)
Capital lease liabilities	(2,983		)	—			—			—			—
Deferred tax liability	—			—			—			—			(9,988		)
Total	$	28,377		$	14,090		$	4,929		$	55,994		$	79,623

During the fourth quarter of 2012, the Company finalized its estimates of the fair value of the acquired assets and liabilities of Silva and Saxon.  There were no changes to the amounts reported in the June 30, 2012 Form 10Q for Silva.  The estimates for the Q3C acquisition are preliminary and subject to change.  For the Saxon acquisition, the final revisions resulted in a change of the amounts reported in the September 30, 2012 Form 10Q.  The change resulted in a decrease of $451 in property, plant and equipment, a decrease of $155 for accounts receivable, an increase of $564 in prepaid expenses and a decrease of other working capital of $168.  Intangible assets were also decreased by $600 and goodwill was increased by $810.  These adjustments have been reflected in the December 31, 2012 financial statements.

Identifiable Tangible Assets.  Significant identifiable tangible assets acquired include accounts receivable, costs and earnings in excess of billings for projects, inventory and fixed assets, consisting primarily of construction equipment, for each of the acquisitions. The Company determined that the recorded value of accounts receivable, costs and earning in excess of billings and inventory reflect fair value of those assets. The Company estimated the fair value of fixed assets on the effective dates of the acquisitions using a market approach, based on comparable market values for similar equipment of similar condition and age.

Identifiable Intangible Assets.  We used the assistance of an independent third party valuation specialist to determine the fair value of the intangible assets acquired for the acquisitions.  The fair value measurements of the intangible assets were based primarily on significant unobservable inputs and thus represent a Level 3 measurement as defined in Note 3 — “Fair Value Measurements”. Based on the Company’s assessment, the acquired intangible asset categories, fair value and average amortization periods, generally on a straight-line basis, are as follows:

		2012 Fair Value						2010 Fair Value
	Amortization	Sprint		Saxon		Q3C		Rockford
	Period	Acquisition		Acquisition		Acquisition		Acquisition
Tradename	3 & 10 years	$	700	$	—	$	6,650	$	7,450
Non-compete agreements	2 to 5 years	450		100		450		2,100
Customer relationships	5 to 15 years	2,450		1,150		14,450		2,750
Backlog	0.75 years	—		100		—		3,210
Total		$	3,600	$	1,350	$	21,550	$	15,510

The fair value of the tradename was determined based on the “relief from royalty” method.  A royalty rate was selected based on consideration of several factors, including external research of third party trade name licensing agreements and their royalty rate levels, and management estimates.  The three year useful life for Sprint was based on the purchase agreement providing for the use of the Sprint tradename for three years. The useful life was estimated at 10 years for Q3C and Rockford based on management’s expectation for continuing value of the tradename in the future.

The fair value for the non-compete agreements was valued based on a discounted “income approach” model, including estimated financial results with and without the non-compete agreements in place.  The agreements were analyzed based on the potential impact of competition that certain individuals could have on the financial results, assuming the agreements were not in place.  An estimate of the probability of competition was applied and the results were compared to a similar model assuming the agreements were in place.

The customer relationships and the Rockford backlog were valued utilizing the “excess earnings method” of the income approach.  The estimated discounted cash flows associated with existing customers and projects were based on historical and market participant data.  Such discounted cash flows were net of fair market returns on the various tangible and intangible assets that are necessary to realize the potential cash flows.

Goodwill.  Goodwill largely consists of expected benefits from the geographic expansion and presence of the various acquisitions in the United States, including the Gulf Coast region from Sprint and Saxon, the Pacific Northwest area from Rockford and the upper Midwest region of the United States from Q3C. Goodwill is also attributable to Sprint’s energy-related opportunities for specialized pipeline construction and related services, Saxon’s expertise in the industrial gas processing and power plant sectors, and Rockford and Q3C with their expanded pipeline and service capabilities, as well as the opportunity to extend our infrastructure operations and other synergies of the combined companies.  Goodwill also includes the value of the assembled workforce of the various acquired businesses.  The fair value of the consideration for the Silva acquisition was equal to the fair value of the fixed assets and net working capital acquired, and management established that there were no intangible assets or goodwill attributable to the purchase.

Based on the current tax treatment of the acquisitions, the goodwill and other intangible assets associated with the Sprint, Saxon and Q3C acquisitions are deductible for income tax purposes over a fifteen-year period.  Since the Rockford acquisition was a stock purchase, the goodwill of $32,079 is not deductible for income tax purposes on a yearly basis.

Supplemental Unaudited Pro Forma Information

In accordance with ASC 805, we are combining the 2012 acquisitions of Sprint, Silva, Saxon and the Q3C acquisition information.  The following pro forma information presents the results of operations of the 2012 acquisitions as if they all occurred on January 1, 2011.  The supplemental pro forma information has been adjusted to include:

· the pro forma impact of amortization of intangible assets and depreciation of property, plant and equipment, based on the fair values assigned to the purchased assets;

· the pro forma impact of the expense associated with the amortization of the discount for the fair value of the contingent consideration for potential earnout liabilities that may be achieved in 2012, 2013 and future periods for the acquisitions.

· the pro forma tax effect of both the income before income taxes and the pro forma adjustments, calculated using a tax rate of 39% for the applicable periods; and

· the pro forma increase in weighted average shares outstanding includes 62,052 unregistered shares of common stock issued as part of the Sprint acquisition.

The pro forma results are presented for illustrative purposes only and are not necessarily indicative of or intended to represent the results that would have been achieved had the transactions been consummated as of  January 1, 2011.  The pro forma results do not reflect any operating efficiencies and associated cost savings that the Company might have achieved with respect to the combined companies.

	2012		2011
	(unaudited)		(unaudited)
Revenues	$	1,673,001	$	1,674,406
Income before provision for income taxes	$	95,254	$	90,799
Net income attributable to Primoris	$	58,678	$	54,940
Weighted average common shares outstanding:
Basic — (1)	51,403		50,769
Diluted — (1)	51,418		51,215
Earnings per share attributable to Primoris:
Basic	$	1.14	$	1.08
Diluted	$	1.14	$	1.07

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Business Combinations (Details) (USD $)	3 Months Ended								12 Months Ended				0 Months Ended	1 Months Ended	12 Months Ended		12 Months Ended		12 Months Ended			12 Months Ended		0 Months Ended	12 Months Ended		1 Months Ended	12 Months Ended		12 Months Ended				0 Months Ended	2 Months Ended	12 Months Ended				12 Months Ended		12 Months Ended				12 Months Ended	1 Months Ended	12 Months Ended	1 Months Ended	12 Months Ended
	Dec. 31, 2012	Sep. 30, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2011	Sep. 30, 2011	Jun. 30, 2011	Mar. 31, 2011	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009	Mar. 12, 2012 Sprint	Mar. 31, 2012 Sprint	Dec. 31, 2012 Sprint	Jun. 30, 2012 Sprint	Dec. 31, 2012 Sprint 2012 earnout target	Mar. 12, 2012 Sprint 2012 earnout target	Dec. 31, 2012 Sprint 2012 earnout target Minimum	Dec. 31, 2012 Sprint 2013 earnout target	Mar. 12, 2012 Sprint 2013 earnout target	Dec. 31, 2012 Silva	May 30, 2012 Silva	Sep. 28, 2012 Saxon item	Dec. 31, 2012 Saxon	Dec. 31, 2012 Saxon Revisions	Feb. 28, 2013 Q3 Contracting	Dec. 31, 2012 Q3 Contracting	Nov. 17, 2012 Q3 Contracting	Dec. 31, 2012 Q3 Contracting Earnout target period from November 18, 2012 through December 31, 2013	Dec. 31, 2012 Q3 Contracting Earnout target period from November 18, 2012 through December 31, 2013 Minimum	Dec. 31, 2012 Q3 Contracting 2014 earnout target	Dec. 31, 2012 Q3 Contracting 2014 earnout target Minimum	Nov. 12, 2010 Rockford	Dec. 31, 2010 Rockford	Dec. 31, 2011 Rockford	Dec. 31, 2010 Rockford	Dec. 31, 2012 Rockford	Nov. 30, 2010 Rockford	Dec. 31, 2012 Rockford Subordinated Promissory Note item	Nov. 12, 2010 Rockford Subordinated Promissory Note	Dec. 31, 2012 Rockford Note A	Nov. 12, 2010 Rockford Note A	Nov. 12, 2010 Rockford Note B	Nov. 30, 2010 Rockford Maximum	Dec. 31, 2012 Rockford 2012 earnout target	Mar. 31, 2011 Rockford 2010 earnout target	Dec. 31, 2012 Rockford 2010 earnout target	Apr. 30, 2012 Rockford 2011 earnout target	Dec. 31, 2012 Rockford 2011 earnout target	Dec. 31, 2011 Rockford 2011 earnout target
Business combinations
Revenue contributed	$ 480,883,000	$ 431,842,000	$ 337,436,000	$ 291,573,000	$ 373,066,000	$ 375,483,000	$ 351,956,000	$ 359,645,000	$ 1,541,734,000	$ 1,460,150,000	$ 941,765,000				$ 92,470,000										$ 7,460,000			$ 12,755,000
Gross profit contributed	54,819,000	56,291,000	44,004,000	37,596,000	51,046,000	52,121,000	41,406,000	40,630,000	192,710,000	185,203,000	122,789,000				15,614,000										46,000			1,408,000
Period for which the acquiree name is allowed to be used														3 years
Revenues																																			85,309,000
Income from continuing operations, before provision for income taxes																																			8,218,000
Net income																																			4,962,000
Acquisition costs															94,000							93,000			14,000			129,000									360,000
Fair value of the consideration transferred to selling shareholders
Cash consideration													21,197,000											550,000					48,116,000					35,039,000
Company common stock													980,000															430,000	430,000					13,600,000
Subordinated promissory note																								2,429,000
Subordinated promissory note																																		16,712,000
Earnout consideration																	4,000,000	3,455,000		3,020,000	2,745,000			1,950,000	2,028,000			7,490,000								5,818,000		1,500,000	14,300,000							6,900,000					6,900,000
Earnout consideration													6,200,000																7,448,000					14,272,000
Total consideration													28,377,000																55,994,000					79,623,000
Cash paid	86,207,000								86,207,000		39,120,000		19,228,000			1,969,000						156,000	13,934,000	2,979,000					48,116,000																				3,450,000
Additional disclosure
Number of shares of common stock issued												81,852.78	62,052		62,052												29,273							1,605,709													494,095	494,095	232,637	232,637
Value of shares of common stock agreed to be issued	(980,000)								(980,000)		(13,600,000)		1,000,000																					12,476,000
Number of business days prior to the closing date upon which average closing price of common stock is based													20 days																					20 days
Cash consideration placed in an escrow account																																		400,000									5,000,000
Amount paid to the subordinated note holders out of the Escrow account																																										1,500,000
Amount of reduction in SG&A expense																																										3,500,000
Amount of accrued interest reversed																																										400,000
Period for which escrow account is to be maintained after the closing date																																				18 months
Contractually calculated per share value (in dollars per share)																																		$ 7.77
Initial principal amount																																									16,712,000		9,669,000	7,043,000
Number of portions of principal amount of debt instrument																																								2
Earnout Consideration
EBITDA threshold for measuring financial performance																			7,000,000	7,750,000				4,000,000							17,700,000		19,000,000
Potential contingent consideration																	4,000,000			4,000,000				2,500,000						3,750,000		3,750,000													18,400,000	6,900,000
Number of targets for payment of contingent cash consideration																								2
Additional potential contingent consideration																														1,250,000		1,250,000
EBITDA threshold for measuring financial performance, case two																								4,750,000							19,000,000		22,000,000
Change in fair value of liability									1,435,000	(2,927,000)	(290,000)						200,000														22,000,000															345,000
Potential contingent consideration																	4,000,000																													6,900,000
Fair value of the assets acquired and the liabilities assumed
Cash																																		19,623,000
Accounts receivable													7,614,000										903,000	2,161,000		(155,000)			17,947,000					57,505,000
Cost and earnings in excess of billings													601,000										23,000	279,000					4,358,000					2,132,000
Inventory and other assets													252,000										353,000	564,000					131,000
Investment in non-consolidated entities																													1,298,000
Deferred tax assets																																		3,383,000
Prepaid expense																										564,000			174,000					813,000
Other working capital																										(168,000)
Property, plant and equipment													12,078,000										14,675,000	2,948,000		(451,000)			20,526,000					24,107,000
Other assets																																		2,400,000
Intangible assets													3,600,000		3,600,000									1,350,000	1,350,000	(600,000)		21,550,000	21,550,000					15,510,000				15,510,000
Goodwill													9,389,000											810,000		810,000			12,562,000					32,079,000				32,079,000
Accounts payable													(1,458,000)										(1,450,000)	(2,952,000)					(4,448,000)					(14,525,000)
Billing in excess of costs and earnings																							(414,000)	(110,000)										(35,408,000)
Accrued expenses													(716,000)											(121,000)					(7,851,000)					(13,324,000)
Notes payable																													(10,253,000)					(4,684,000)
Capital lease obligations													(2,983,000)
Deferred tax liability																																		(9,988,000)
Total													$ 28,377,000										$ 14,090,000	$ 4,929,000					$ 55,994,000					$ 79,623,000

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Stockholders' Equity (Details) (USD $)	0 Months Ended	1 Months Ended					3 Months Ended	12 Months Ended			1 Months Ended	0 Months Ended	12 Months Ended	1 Months Ended	12 Months Ended	1 Months Ended		0 Months Ended	1 Months Ended	12 Months Ended	1 Months Ended	12 Months Ended	1 Months Ended
	Apr. 12, 2010	Aug. 31, 2012	Mar. 31, 2012	Feb. 29, 2012	Aug. 31, 2011	Mar. 31, 2011	Jun. 30, 2012	Dec. 31, 2012 item	Dec. 31, 2011	Dec. 31, 2009	May 31, 2012 Maximum	Mar. 12, 2012 Sprint	Dec. 31, 2012 Sprint	Mar. 31, 2010 Former Primoris 2009 earnout target	Dec. 31, 2012 JCG	Mar. 31, 2011 JCG 2010 earnout target	Mar. 31, 2010 Craven 2009 earnout target	Nov. 12, 2010 Rockford	Mar. 31, 2011 Rockford 2010 earnout target	Dec. 31, 2012 Rockford 2010 earnout target	Apr. 30, 2012 Rockford 2011 earnout target	Dec. 31, 2012 Rockford 2011 earnout target	Feb. 28, 2013 Q3 Contracting	Dec. 31, 2012 Q3 Contracting	Nov. 17, 2012 Q3 Contracting
Stockholders' equity
Common stock, authorized (in shares)								90,000,000	90,000,000
Par value of common stock (in dollars per share)								$ 0.0001	$ 0.0001
Common stock issued (in shares)								51,403,686	51,059,132
Common stock outstanding (in shares)								51,403,686	51,059,132
Number of holders of common stock								302
Amount received in exchange for shares of common stock under a purchase arrangement			$ 1,240,000			$ 647,000
Shares of common stock issued to managers and executives under a purchase arrangement within the Long-Term Incentive Plan			111,790			94,966		111,790	94,966
Shares of common stock reserved for issuance upon exercise of all future stock option grants, SARS and grants of restricted shares under the 2008 Equity Plan								1,270,744
Shares of common stock issued as a part of quarterly compensation of non-employee members of the Board of Directors		15,280		12,395	14,825			27,675	14,825
Value of company's common stock issuable as part of acquisition												980,000						13,600,000						430,000	430,000
Price of shares issued (in dollars per share)																								$ 14.69
Stock issued to sellers (in shares)										81,852.78		62,052	62,052	2,499,975		1,095,646	74,906	1,605,709	494,095	494,095	232,637	232,637	29,273
Aggregate purchase price up to which shares can be acquired under share repurchase program											20,000,000
Number of shares purchased and cancelled under the share repurchase program							89,600
Amount paid for shares purchased and cancelled under share repurchase program							$ 1,000,000
Average cost of repurchased shares of stock (in dollars per share)							$ 11.17
Preferred stock, authorized (in shares)								1,000,000	1,000,000
Par value of preferred stock (in dollars per share)								$ 0.0001	$ 0.0001
Preferred stock issued (in shares)															81,852.78
Shares of preferred stock approved by shareholders for conversion into common stock (in shares)	81,852.78
Shares of common stock issued on conversion of preferred stock	8,185,278

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Noncontrolling Interests (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended								12 Months Ended
	Dec. 31, 2012	Sep. 30, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2011	Sep. 30, 2011	Jun. 30, 2011	Mar. 31, 2011	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Noncontrolling Interests
Net income attributable to noncontrolling interests									$ 1,511
Accounts receivable	268,095				187,378				268,095	187,378
Current liabilities	420,669				345,019				420,669	345,019
Carrying value of assets	931,207				728,413				931,207	728,413
Carrying value of liabilities	598,569				453,481				598,569	453,481
Revenues	480,883	431,842	337,436	291,573	373,066	375,483	351,956	359,645	1,541,734	1,460,150	941,765
Blythe joint venture
Noncontrolling Interests
Net income attributable to noncontrolling interests									1,511
Cash	3,565								3,565
Accounts receivable	8,843								8,843
Current liabilities	9,379								9,379
Carrying value of assets					2,546					2,546
Carrying value of liabilities					2,540					2,540
Blythe joint venture | Primary beneficiary
Noncontrolling Interests
Revenues									$ 25,769

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Income Taxes

12 Months Ended

Dec. 31, 2012

Income Taxes

Income Taxes

Note 21—Income Taxes

The components of the provision for income taxes are as follows:

	2012			2011			2010
Current provision (benefit)
Federal	$	27,524		$	24,791		$	18,491
State	7,125			5,697			4,663
Foreign	67			621			1,081
	$	34,716		$	31,109		$	24,235
Deferred provision (benefit)
Federal	(451		)	6,488			(1,951		)
State	(366		)	849			(189		)
Foreign	(62		)	(122		)	(36		)
	(879		)	7,215			(2,176		)
Change in valuation allowance	—			(150		)	—
Total	$	33,837		$	38,174		$	22,059

A reconciliation of income tax expense compared to the amount of income tax expense that would result by applying the U.S. federal statutory income tax rate to pre-tax income is as follows:

	2012		2011		2010
U.S. federal statutory income tax rate	35.00	%	35.00	%	35.00	%
State taxes, net of federal income tax impact	4.87	%	4.33	%	4.52	%
Foreign tax credit	(0.01	)%	(0.52	)%	(1.88	)%
Canadian income tax	0.01	%	0.52	%	1.88	%
Domestic production activities deduction	(2.97	)%	(2.79	)%	(3.30	)%
Other items	0.45	%	2.92	%	3.40	%
Effective tax rate on income before provision for income taxes excluding income attributable to noncontrolling interests	37.35	%	39.46	%	39.62	%
Impact of income from noncontrolling interests on effective tax rate	(0.61	)%	—		—
Effective tax rate on income before provision for income taxes and noncontrolling interests	36.74	%	39.46	%	39.62	%

Deferred income taxes are recognized for temporary differences between the financial reporting basis of the assets and liabilities and their respective tax basis and operating losses, capital losses and tax credit carry-forwards based on enacted tax rates expected to be in effect when such amounts are realized or settled. However, deferred tax assets are recognized only to the extent that it is more likely than not that they will be realized based on consideration of available evidence, including future reversals of existing taxable temporary differences, future projected taxable income and tax planning strategies.

During 2009, the Company recognized a capital loss related to the sale of its equity interest in ARB Avenal. A valuation allowance of $344 has been provided against the Company’s deferred tax for its capital loss carryforward as the Company believes that it is more likely than not that this capital loss will not be realized. The Company’s determination that it will not fully realize this deferred tax asset is based upon the Company’s future unlikelihood of generating sufficient capital gains. No valuation allowance has been provided to the Company’s remaining deferred tax assets as the Company believes it is more likely than not that these deferred tax assets will be realized.

The tax effect of temporary differences that give rise to deferred income taxes for the year ended December 31, 2012 and 2011 are as follows:

	2012			2011
Deferred tax assets:
Accrued workers compensation	$	4,973		$	4,023
Insurance reserves	1,114			2,657
Other accrued liabilities	10,434			6,604
State income taxes	1,537			1,605
Capital loss carryforward	344			344
Foreign tax credit	662			644
Valuation allowance	(344		)	(344		)
Total deferred tax assets	18,720			15,533
Deferred tax liabilities
Depreciation and amortization	(26,661		)	(24,659		)
Prepaid expenses and other	(1,600		)	(1,294		)
Total deferred tax liabilities	(28,261		)	(25,953		)
Total	$	(9,541	)	$	(10,420	)

The Company recognizes accrued interest and penalties related to uncertain tax positions, if any, as a component of income tax expense.

At December 31, 2012 and 2011, there were no material unrecognized tax benefits and the Company does not anticipate that there will be a material change in the balance of the unrecognized tax benefits within the next 12 months.

In the third quarter of 2012, the Internal Revenue Service (“IRS”) concluded an examination of our federal income tax returns for 2008 and 2009.  The conclusion of these examinations did not have a material impact on the financial statements.  The tax years 2010 through 2011 remain open to examination by the IRS.  The statute of limitations of state and foreign jurisdictions vary generally between 3 to 5 years.  Accordingly, the tax years 2007 through 2011 generally remain open to examination by the other major taxing jurisdictions in which the Company operates.

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Customer Concentrations (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended								12 Months Ended
	Dec. 31, 2012	Sep. 30, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2011	Sep. 30, 2011	Jun. 30, 2011	Mar. 31, 2011	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Customer concentrations
Amount	$ 480,883	$ 431,842	$ 337,436	$ 291,573	$ 373,066	$ 375,483	$ 351,956	$ 359,645	$ 1,541,734	$ 1,460,150	$ 941,765
Revenues | Customer concentration
Customer concentrations
Amount									690,670	679,787	389,040
Percentage									44.80%	46.50%	41.20%
Revenues | Customer concentration | Texas DOT
Customer concentrations
Amount									88,783
Percentage									5.80%
Revenues | Customer concentration | Texas DOT | Maximum
Customer concentrations
Percentage										5.00%	5.00%
Revenues | Customer concentration | Public gas and electric utility
Customer concentrations
Amount									224,845	165,373	69,212
Percentage									14.60%	11.30%	7.30%
Revenues | Customer concentration | Gas utility
Customer concentrations
Amount									86,786
Percentage									5.60%
Revenues | Customer concentration | Gas utility | Maximum
Customer concentrations
Percentage										5.00%	5.00%
Revenues | Customer concentration | Private gas and electric utility
Customer concentrations
Amount									106,804
Percentage									6.90%
Revenues | Customer concentration | Private gas and electric utility | Maximum
Customer concentrations
Percentage										5.00%	5.00%
Revenues | Customer concentration | Louisiana DOT
Customer concentrations
Amount									170,899	239,516	193,139
Percentage									11.10%	16.40%	20.50%
Revenues | Customer concentration | Public state agency
Customer concentrations
Amount											47,465
Percentage											5.00%
Revenues | Customer concentration | Public state agency | Maximum
Customer concentrations
Percentage									5.00%	5.00%
Revenues | Customer concentration | Gas utility (Ruby Pipeline Project)
Customer concentrations
Amount									12,553	274,898	79,224
Percentage									0.80%	18.80%	8.40%
Revenues | Customer concentration | Top ten customers
Customer concentrations
Amount									$ 862,300	$ 1,000,000
Percentage									55.90%	68.50%	55.30%
Number of top customers									10
Revenues | Customer concentration | One customer
Customer concentrations
Percentage									14.60%	11.30%
Accounts receivable | Customer concentration | One customer
Customer concentrations
Percentage									10.00%	15.50%
Number of customers									1	1

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Equity Method Investments (Tables)

12 Months Ended

Dec. 31, 2012

WesPac

Equity method investments

Summary of the financial position and results

	2012			2011
WesPac Energy, LLC
Balance sheet data:
Assets	$	16,896		$	20,147
Liabilities	1,063			1,820
Net assets	$	15,833		$	18,327
Company’s equity investment in affiliate	$	11,463		$	12,415
Earnings data:
Revenue	$	552		$	1,717
Expenses	2,455			9,303
Earnings before taxes	$	(1,903	)	$	(7,586	)
Company’s equity in earnings	$	(952	)	$	(3,793	)

Bernard

Equity method investments

Summary of the financial position and results

	2012		2011
St. Bernard Levee Partners
Balance sheet data:
Assets	$	592	$	5,677
Liabilities	86		4,771
Net assets	$	506	$	906
Company’s equity investment in affiliate	$	150	$	272
Earnings data:
Revenue	$	4,026	$	72,822
Expenses	227		39,650
Earnings before taxes	$	3,799	$	33,172
Company’s equity in earnings	$	1,138	$	9,415

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Commitments and Contingencies

12 Months Ended

Dec. 31, 2012

Commitments and Contingencies

Commitments and Contingencies

Note 14—Commitments and Contingencies

Leases—The Company leases certain property and equipment under non-cancelable operating leases which expire at various dates through 2019.  The leases require the Company to pay all taxes, insurance, maintenance, and utilities and are classified as operating leases in accordance with ASC Topic 840 “Leases”.  Leases identified below as related party leases represent property with entities related through common ownership by stockholders, officers, and directors of the Company.

The future minimum lease payments required under non-cancelable operating leases are as follows:

For the Years Ending December 31,	Real Property		Real Property (Related Party)		Equipment		Total Commitments
2013	$	2,728	$	1,597	$	7,207	$	11,532
2014	2,001		1,563		6,041		9,605
2015	1,829		941		4,539		7,309
2016	1,465		775		2,418		4,658
2017	1,392		786		483		2,661
Thereafter	2,944		2,308		—		5,252
	$	12,359	$	7,970	$	20,688	$	41,017

Total lease expense during the years ended December 31, 2012, 2011 and 2010 amounted to approximately $10,684, $9,530 and $9,856, respectively, including amounts paid to related parties of $1,342, $1,278 and $1,151, respectively.

Withdrawal liability for multiemployer pension plan—In November 2011, Rockford, ARB and Q3C, along with other members of the Pipe Line Contractors Association (“PLCA”), withdrew from the Central States Southeast and Southwest Areas Pension Fund multiemployer pension plan (the “Plan”). In connection with the withdrawal, the Company has recorded an estimated liability of $7,500 based on information provided by the Plan. The Company withdrew from the Plan in order to mitigate its liability in connection with the Plan, which is significantly underfunded. The Plan has asserted that the PLCA members did not affect a withdrawal in 2011, although the Company believes that a legally effective withdrawal occurred in November 2011 and has recorded the withdrawal liability on that basis. If the Plan were to prevail in its assertion and the withdrawal of the Company were deemed to occur after 2011, the amount of any withdrawal liability would be expected to increase

Letters of credit—As of December 31, 2012 and 2011 the Company had total letters of credit outstanding of approximately $6,168 and $11,798, respectively.  The outstanding amounts include the U.S. dollar equivalents for letters of credit issued in Canadian dollars.

Litigation—The Company is subject to claims and legal proceedings arising out of its business. Management believes that the Company has meritorious defenses to the claims. Although management is unable to ascertain the ultimate outcome of such matters, after review and consultation with counsel and taking into consideration relevant insurance coverage and related deductibles, management believes that the outcome of these matters will not have a materially adverse effect on the consolidated financial position of the Company.

Bonding—As of December 31, 2012, 2011 and 2010, the Company had bid and completion bonds issued and outstanding totaling approximately $1,298,589, $1,105,933 and $849,288, respectively.

Contingent Consideration—Earnouts related to acquisitions as discussed in Note 4