Accounts Receivable, Net of Allowance, and Contract Assets and Liabilities

3 Months Ended

Mar. 31, 2020

Accounts Receivable, Net of Allowance, and Contract Assets and Liabilities

Note 5 – Accounts Receivable, Net of Allowance, and Contract Assets and Liabilities

The following table provides details of accounts receivable, net of allowance, and contract assets (together, “accounts receivable, net”) as of the dates indicated (in millions):



	March 31, 2020			December 31, 2019
Contract billings	$	806.0		$	860.4
Less allowance	(9.9		)	(10.1		)
Accounts receivable, net of allowance	$	796.1		$	850.3

Retainage	288.5			345.2
Unbilled receivables	709.4			679.4
Contract assets	$	997.9		$	1,024.6

Contract billings represent the amount of performance obligations that have been billed but not yet collected. Contract assets consist of unbilled receivables and retainage. Unbilled receivables represent the estimated value of unbilled work for projects with performance obligations recognized over time. Retainage represents a portion of the contract amount that has been billed, but for which the contract allows the customer to retain a portion of the billed amount until final contract settlement (generally, from 5% to 10% of contract billings). For the three month period ended March 31, 2020, provisions for credit losses totaled $1.6 million and impairment losses on contract assets were not material.

Contract liabilities consist primarily of deferred revenue. Under certain contracts, the Company may be entitled to invoice the customer and receive payments in advance of performing the related contract work. In those instances, the Company recognizes a liability for advance billings in excess of revenue recognized, which is referred to as deferred revenue. Contract liabilities also include the amount of any accrued project losses. Total contract liabilities, including accrued project losses, totaled approximately $204.3 million and $206.2 million as of March 31, 2020 and December 31, 2019, respectively, of which deferred revenue comprised approximately $181.4 million and $184.1 million, respectively. For the three month period ended March 31, 2020, the Company recognized revenue of approximately $105.6 million related to amounts that were included in deferred revenue as of December 31, 2019, resulting primarily from the advancement of physical progress on the related projects during the period.

The Company is party to non-recourse financing arrangements in the ordinary course of business, under which certain receivables are settled with the customer’s bank in return for a nominal fee. Discount charges related to these arrangements, which are included within interest expense, net, totaled approximately $1.8 million and $2.9 million for the three month periods ended March 31, 2020 and 2019, respectively.