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

6 Months Ended

Jun. 30, 2023

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):


	June 30, 2023		December 31, 2022
Contract billings	$	1,492.2	$	1,408.1
Less allowance	(7.0)		(8.4)
Accounts receivable, net of allowance	$	1,485.2	$	1,399.7

Retainage	353.9		401.9
Unbilled receivables	1,496.8		1,328.0
Contract assets	$	1,850.7	$	1,729.9

Contract billings represent the amount of performance obligations that have been billed but not yet collected, whereas 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 six month period ended June 30, 2023, provisions for credit losses totaled a recovery of approximately $0.7 million, and for the six month period ended June 30, 2022, provisions for credit losses totaled approximately $0.5 million. Impairment losses on contract assets were not material in either period.

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 $487.2 million and $406.2 million as of June 30, 2023 and December 31, 2022, respectively, of which deferred revenue comprised approximately $476.7 million and $390.3 million, respectively. The increase in contract liabilities as of June 30, 2023 was driven primarily by ordinary course project activity related to new project starts within the Company’s Clean Energy and Infrastructure segment. For the six month period ended June 30, 2023, the Company recognized revenue of approximately $342.2 million related to amounts that were included in deferred revenue as of December 31, 2022, resulting primarily from the advancement of physical progress on the related projects during the period, including amounts from recently acquired businesses.

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 $4.2 million and $1.5 million for the three month periods ended June 30, 2023 and 2022, respectively, and totaled $8.0 million and $2.5 million, respectively, for the six month periods ended June 30, 2023 and 2022. The Company also has financing arrangements with certain customers, which arrangements were not considered significant as of June 30, 2023.