XML 63 R7.htm IDEA: XBRL DOCUMENT v2.4.1.9
Description of Business and Basis of Presentation
12 Months Ended
Dec. 31, 2014
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Description of Business and Basis of Presentation
Description of Business and Basis of Presentation

Description of Business

Orion Marine Group, Inc. and its subsidiaries and affiliates (hereafter collectively referred to as “Orion” or the “Company”) provide a broad range of heavy civil marine construction services on, over and under the water in the continental United States, Alaska, Canada and in the Caribbean Basin.  Our heavy civil marine projects include marine transportation facilities; bridges and causeways; marine pipelines; mechanical and hydraulic dredging and specialty projects.  We are headquartered in Houston, Texas.

Although we describe our business in this report in terms of the services we provide, our base of customers and the geographic areas in which we operate, we have concluded that our operations may be aggregated into a single reportable segment pursuant to Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 280 – Segment Reporting. In making this determination, we considered the various economic characteristics of our operations, including: the nature of the services we provide; the nature of our internal processes for the production of our services; the methods used to provide out services to our customers; the types of customers we have; the nature of the regulatory environment in which we operate; and our assessment of our future prospects.

We provide heavy civil marine construction services through projects that are obtained primarily by a competitive bid or negotiated contract process. Our projects have similar cost structures, including labor, equipment, materials and subcontractors. Our workforce is standard across the services we provide, including pile drivers, equipment operators, carpenters, welders, barge crews, dredge crews, supervisors and project managers. This allows our core resources of assets and individuals to be deployed interchangeably to the various types of the services we provide. For example, crews and equipment deployed to a dock construction job may be redeployed to a bridge construction job and to a marsh creation job after that. This allows us to use our resources based on availability across our business. Similarly, basic materials such as concrete and steel are used in our projects, which provides us with similar costs across our operations, especially through the use of national accounts with vendors. Additionally, we self-perform most of our projects internally, which limits our use of subcontractors to those providing similar services with similar cost structures.

We execute our projects in a similar fashion with a centralized estimating, project controls and management group, and the risks and rewards of project performance are not affected by the location of the specific project. Because our core resources may be deployed to various types of marine construction projects, we have developed a centralized philosophy for operating our business. We utilize the same technology across our business, including estimating and cost control applications.

Our methods used to provide our services is similar. Our assets and labor force may be interchangeable within the various types of marine construction projects. This provides us with the flexibility to manage our business as one operating unit deploying resources based on availability across our business.

We have the same customers with similar funding drivers and market demands across our entire business. Our business wide customers include the U.S. Army Corps of Engineers, U.S. Navy, U.S. Coast Guard, state transportation departments, local port authorities and private customers such as petrochemical terminal operators, private terminal operators and cruise line facilities. We consider funding availability to be similar across our business, particularly in the form of governmental budgeting (federal, state and local) and capital expenditure and maintenance and repair spending by private customers.

Across our business, we comply with macro environmental regulatory environments driven through Federal agencies such as the U.S. Army Corps of Engineers, U.S. Fish and Wildlife Service, U.S. Environmental Protection Agency and the U.S. Occupational Safety and Health Administration, as well as others.

Our business is primarily driven by macro-economic considerations including increases in import/export traffic, development of energy related infrastructure, cruise line expansion and operations, marine bridge infrastructure development, waterway pipeline crossings and the maintenance of our nation’s waterways. These macro drivers are the key catalyst for future prospects for work and are similar across our entire business.

Furthermore, the types of information and internal reports used by our chief operating decision maker (the “CODM”) to monitor performance, evaluate results of operations, allocate resources, and manage the business support a single reportable segment. Accordingly, based on these similarities, we have concluded that our operations represent one reportable segment for purposes of the disclosures included in this Annual Report on Form 10-K.

Basis of Presentation

These consolidated financial statements include the accounts of the parent company, Orion Marine Group, Inc. and its wholly-owned subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States of America.  All significant intercompany balances and transactions have been eliminated in consolidation.