Discontinued Operations

3 Months Ended

Mar. 31, 2016

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations

The following disposals qualify for discontinued operations treatment under ASU 2014-08, which the Company adopted on January 1, 2015.

Professional Services

On November 30, 2015, the Company sold the balance of its Professional Services segment to TRC Companies ("TRC") for $130.0 million in cash, subject to working capital and other adjustments. At closing, TRC held back $7.5 million from the purchase price (the "Holdback Amount") until the Company effects the novation of a customer contract from one of the subsidiaries sold in the transaction to the Company (or obtains written approval of a subcontract of all the work that is the subject of such contract) and obtains certain consents. If such novation, subcontract or consents were not approved by March 15, 2016, TRC would pay the Holdback Amount to the Company. In the first quarter of 2016, the Company received $2.4 million of the Holdback Amount from TRC.

In connection with this transaction, the Company recorded a net gain on sale of $97.0 million during the fourth quarter of 2015. In the first quarter of 2016, the Company recorded a $1.5 million charge against the net gain on sale in relation to a working capital adjustment. The Company continues to evaluate the need for any additional working capital adjustments that would further impact the net gain on sale previously recorded.

Certain assets and liabilities associated with one Professional Services contract were retained by the Company and have been excluded from the transaction.

In 2015, and prior to the sale of the balance of the Professional Services segment, the Company sold the following three subsidiaries that were historically part of the Professional Services segment.

Downstream Professional Services

On June 12, 2015, the Company sold all of its issued and outstanding equity of Downstream Professional Services to BR Engineers, LLC for approximately $10.0 million in cash. The closing consideration is subject to working capital and other typical post-closing adjustments. In connection with this transaction, the Company recorded a net loss on sale of $2.2 million during the second quarter of 2015.

Premier

On March 31, 2015, the Company sold all of its membership units in Premier to USIC Locating Services, LLC for approximately $51.0 million in cash, of which $4.0 million was deposited into an escrow account for a period of up to eighteen months to cover post-closing adjustments and any indemnification obligations of the Company. The closing consideration is subject to typical post-closing adjustments. In connection with this transaction, the Company recorded a net gain on sale of $37.1 million during the first quarter of 2015.

UtilX

On March 17, 2015, the Company sold all of its equity interests of UtilX to Novinium, Inc. for approximately $40.0 million in cash, of which $0.5 million was deposited into an escrow account for a period of six months to cover post-closing adjustments and any indemnification obligations of the Company. In connection with this transaction, the Company recorded a net gain on sale of $21.4 million during the first quarter of 2015. The Company subsequently reported post-closing adjustments in 2015 against the net gain on sale related to the release of the $0.5 million escrow and a $0.6 million arbitrator settlement of a working capital dispute.

Hawkeye

In the fourth quarter of 2013, the Company sold certain assets comprising its Hawkeye business to Elecnor Hawkeye,

LLC, a subsidiary of Elecnor, Inc. (“Elecnor”). The Maine Power Reliability Program Project was retained by the Company and subsequently completed in 2015.

Results of Discontinued Operations

Condensed Statements of Operations with respect to discontinued operations are as follows (in thousands):

	Three Months Ended March 31, 2016
	Professional Services			Hawkeye			Total
Contract revenue	$	1,124		$	—		$	1,124
Contract costs	1,070			—			1,070
Loss on sale of subsidiary	1,545			—			1,545
General and administrative	361			—			361
Operating loss	(1,852		)	—			(1,852		)
Non-operating expenses	1			—			1
Pre-tax loss	(1,853		)	—			(1,853		)
Provision for income taxes	—			—			—
Loss from discontinued operations	$	(1,853	)	$	—		$	(1,853	)
	Three Months Ended March 31, 2015
	Professional Services			Hawkeye			Total
Contract revenue	$	96,578		$	921		$	97,499
Contract costs	85,139			919			86,058
Amortization of intangibles	624			—			624
Gain on sale of subsidiaries	(58,549		)	—			(58,549		)
General and administrative	11,978			412			12,390
Other charges	940			—			940
Operating income (loss)	56,446			(410		)	56,036
Non-operating income (expenses)	12			(17		)	(5		)
Pre-tax income (loss)	56,434			(393		)	56,041
Provision for income taxes	20,921			—			20,921
Income (loss) from discontinued operations	$	35,513		$	(393	)	$	35,120

Condensed Balance Sheets with respect to discontinued operations are as follows (in thousands):

	March 31, 2016
	Professional Services			Hawkeye			Total
Accounts receivable, net	$	684		$	—		$	684
Contract cost and recognized income not yet billed	1,124			—			1,124
Prepaid expenses and other current assets	1			—			1
Total assets associated with discontinued operations	1,809			—			1,809
Accounts payable and accrued liabilities	169			449			618
Contract billings in excess of costs and recognized income	1,216			—			1,216
Other current liabilities	885			—			885
Other long-term liabilities	1,364			—			1,364
Total liabilities associated with discontinued operations	3,634			449			4,083
Net liabilities of discontinued operations	$	(1,825	)	$	(449	)	$	(2,274	)

	December 31, 2015
	Professional Services			Hawkeye			Total
Accounts receivable, net	$	313		$	9		$	322
Contract cost and recognized income not yet billed	924			—			924
Prepaid expenses and other current assets	—			1			1
Total assets associated with discontinued operations	1,237			10			1,247
Accounts payable and accrued liabilities	815			452			1,267
Contract billings in excess of costs and recognized income	1,457			—			1,457
Other current liabilities	1,303			—			1,303
Other long-term liabilities	1,423			—			1,423
Total liabilities associated with discontinued operations	4,998			452			5,450
Net liabilities of discontinued operations	$	(3,761	)	$	(442	)	$	(4,203	)