Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2019

Accounting Policies [Abstract]

Accumulated Other Comprehensive Income (Loss), Policy [Policy Text Block]

Accumulated Other Comprehensive Loss

As set forth below, the Company’s accumulated other comprehensive loss is comprised of three main components: (i) currency translation; (ii) derivatives; and (iii) gains and losses associated with the Company’s defined benefit plan in the United Kingdom (in thousands):

	September 30, 2019			December 31, 2018
Currency translation adjustments (1)	$	(37,595	)	$	(41,107	)
Derivative hedging activity		(5,164	)		1,715
Pension activity		(867	)		(898	)
Total accumulated other comprehensive loss	$	(43,626	)	$	(40,290	)

⁽¹⁾  During the nine months ended September 30, 2019, as a result of disposing of certain international entities, $6.3 million was reclassified out of accumulated other comprehensive loss to “Other expense” in the Consolidated Statements of Operations.

For the Company’s international subsidiaries, the local currency is generally the functional currency.  Assets and liabilities of these subsidiaries are translated into U.S. dollars using rates in effect at the balance sheet date while revenues and expenses are translated into U.S. dollars using average exchange rates.  The cumulative translation adjustment resulting from changes in exchange rates are included in the Consolidated Balance Sheets as a component of “Accumulated other comprehensive loss” in total stockholders’ equity.  Net foreign exchange transaction losses of $0.9 million and $0.4 million in the third quarters of 2019 and 2018, respectively, and losses of $1.6 million and $1.2 million for the nine months ended September 30, 2019 and 2018, respectively, are included in “Other expense” in the Consolidated Statements of Operations.

Income Tax, Policy [Policy Text Block]

Taxation

The Company provides for estimated income taxes payable or refundable on current year income tax returns as well as the estimated future tax effects attributable to temporary differences and carryforwards, based upon enacted tax laws and tax rates, and in accordance with FASB ASC 740, Income Taxes (“FASB ASC 740”).  FASB ASC 740 also requires that a valuation allowance be recorded against any deferred tax assets that are not likely to be realized in the future.  The determination is based on the Company’s ability to generate future taxable income and, at times, is dependent on its ability to implement strategic tax initiatives to ensure full utilization of recorded deferred tax assets.  Should the Company not be able to implement the necessary tax strategies, it may need to record valuation allowances for certain deferred tax assets, including those related to foreign income tax benefits.  Significant management judgment is required in determining the provision for income taxes, deferred tax assets and liabilities and any valuation allowances recorded against net deferred tax assets.

Earnings Per Share, Policy [Policy Text Block]

Earnings per Share

Earnings per share have been calculated using the following share information:

	Quarters Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
Weighted average number of common shares used for basic EPS		30,866,188		32,312,000		31,259,594		32,390,777
Effect of dilutive stock options and restricted and deferred stock unit awards		511,244		—		—		667,229
Weighted average number of common shares and dilutive potential common stock used for dilutive EPS		31,377,432		32,312,000		31,259,594		33,058,006

The Company excluded 664,661 restricted and deferred stock units for the quarter ended September 30, 2018 and 497,192 restricted and deferred stock units for the nine months ended September 30, 2019 from the diluted earnings per share calculation for the Company’s common stock because of the reported net loss for the periods.

Cash and Cash Equivalents, Restricted Cash and Cash Equivalents, Policy [Policy Text Block]

Cash, Cash Equivalents and Restricted Cash

The Company classifies highly liquid investments with original maturities of 90 days or less as cash equivalents. Recorded book values are reasonable estimates of fair value for cash and cash equivalents.

Cash, cash equivalents and restricted cash reported within the Consolidated Balance Sheets and Consolidated Statements of Cash Flows are as follows (in thousands):

Balance sheet data	September 30, 2019		December 31, 2018
Cash and cash equivalents	$	51,981	$	83,527
Restricted cash		2,615		1,359
Cash, cash equivalents and restricted cash	$	54,596	$	84,886

Restricted cash held in escrow primarily relates to funds reserved for legal requirements, deposits made in lieu of retention on specific projects performed for municipalities and state agencies, or advance customer payments and compensating balances for bank undertakings in Europe.  Restricted cash related to operations is similar to retainage, and is, therefore, classified as a current asset, consistent with the Company’s policy on retainage.

Consolidation, Variable Interest Entity, Policy [Policy Text Block]

Investments in Variable Interest Entities

The Company evaluates all transactions and relationships with variable interest entities (“VIE”) to determine whether the Company is the primary beneficiary of the entities in accordance with FASB ASC 810, Consolidation.  There were no changes in the Company’s VIEs during the quarter ended September 30, 2019.

Financial data for consolidated variable interest entities are summarized in the following tables (in thousands):

Balance sheet data	September 30, 2019 (1)		December 31, 2018
Current assets	$	18,236	$	33,066
Non-current assets		6,878		6,466
Current liabilities		8,949		12,953
Non-current liabilities		3,252		8,780

⁽¹⁾  Includes $3.5 million of assets and $5.2 million of liabilities classified as held for sale related to United Mexico. See Note 5.

	Quarters Ended September 30,						Nine Months Ended September 30,
Statement of operations data	2019			2018 (1)			2019			2018 (1)
Revenue	$	7,275		$	16,405		$	20,719		$	39,179
Gross profit		2,412			3,238			6,463			6,982
Net income attributable to Aegion Corporation		(2,154	)		(946	)		(2,773	)		(886	)

⁽¹⁾  Includes activity from our pipe coating and insulation joint venture in Louisiana, which was sold during the third quarter of 2018.

New Accounting Pronouncements, Policy [Policy Text Block]

Newly Issued Accounting Pronouncements

In August 2018, the FASB issued Accounting Standards Update No. 2018-13, Fair Value Measurement: Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement, which modifies the disclosure requirements for Level 1, Level 2 and Level 3 instruments in the fair value hierarchy.  The guidance is effective for the Company’s fiscal year beginning January 1, 2020, including interim periods within that fiscal year.  The adoption of this standard is not expected to have a material impact on its consolidated financial statements.

In February 2018, the FASB issued Accounting Standards Update No. 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, which permits a company to reclassify the income tax effects of the Tax Cuts and Jobs Act on items within accumulated other comprehensive income to retained earnings.  Companies may adopt the new guidance using one of two transition methods: (i) retrospective to each period (or periods) in which the income tax effects are recognized, or (ii) at the beginning of the period of adoption.  The Company adopted this standard effective January 1, 2019 and elected not to reclassify the tax effects due to the immaterial impact on the Company’s consolidated financial statements.

In June 2016, the FASB issued Accounting Standards Update No. 2016-13, Measurement of Credit Losses on Financial Instruments, which changes the way in which entities estimate and present credit losses for most financial assets, including accounts receivable.  The guidance is effective for the Company’s fiscal year beginning January 1, 2020, including interim periods within that fiscal year.  Early adoption is permitted, although the Company does not intend to do so.  For the Company’s trade receivables, certain other receivables and certain other financial instruments, it will be required to use a new forward-looking “expected” credit loss model based on historical loss rates that will replace the existing “incurred” credit loss model, which will generally result in earlier recognition of allowances for credit losses.  The Company is currently evaluating the impact this guidance will have on its consolidated financial statements and does not expect it will have a material impact on the Company’s consolidated financial statements.

In February 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases (Topic 842), which requires lessees to present right-of-use assets and lease liabilities on the balance sheet for all leases with lease terms longer than twelve months.  The Company adopted this standard, effective January 1, 2019, using the adoption-date transition provision, which recognizes and measures leases existing at January 1, 2019 but without retrospective application.  See Note 6.