Construction Contracts

Construction contract costs and estimated earnings in excess of billings represent reimbursable costs and amounts earned under contracts in progress as of the balance sheet date. Such amounts become billable according to contract terms, which usually consider the passage of time, achievement of certain milestones or completion of the project. The Company expects to bill and collect substantially all construction contract costs and estimated earnings in excess of billings as of June 30, 2018 during the next twelve months.

Billings in excess of construction contract costs and estimated earnings represent billings or collections on contracts made in advance of revenue recognized.

The following table summarizes the changes to the balances in the Company’s construction contract costs and estimated earnings in excess of billings account and the billings in excess of construction contract costs and estimated earnings account for the six months ended June 30, 2018 (in thousands):



	Construction contract costs and estimated earnings in excess of billings			Billings in excess of construction contract costs and estimated earnings
Balance as of January 1, 2018	$	245		$	3,591
Revenue recognized that was included in the balance at the beginning of the period	—			(3,591		)
Increases due to new billings, excluding amounts recognized as revenue during the period	—			1,898
Transferred to receivables	(245		)	—
Construction contract costs and estimated earnings not billed during the period	1,287			—
Changes due to cumulative catch-up adjustment arising from changes in the estimate of the stage of completion	—			(187		)
Balance as of June 30, 2018	$	1,287		$	1,711

The Company defers pre-contract costs when such costs are directly associated with specific anticipated contracts and their recovery is probable. Pre-contract costs of $0.5 million and $0.6 million were deferred as of June 30, 2018 and December 31, 2017, respectively.

Construction receivables and payables include retentions, amounts that are generally withheld until the completion of the contract or the satisfaction of certain restrictive conditions such as fulfillment guarantees. As of June 30, 2018 and December 31, 2017, construction receivables included retentions of $8.9 million and $9.9 million, respectively. The Company expects to collect substantially all construction receivables as of June 30, 2018 during the next twelve months. As of June 30, 2018 and December 31, 2017, construction payables included retentions of $17.4 million and $17.4 million, respectively. The Company expects to pay substantially all construction payables as of June 30, 2018 during the next twelve months.

The Company’s net position on uncompleted construction contracts comprised the following as of June 30, 2018 and December 31, 2017 (in thousands):



	June 30, 2018			December 31, 2017
Costs incurred on uncompleted construction contracts	$	562,879		$	520,368
Estimated earnings	19,222			18,070
Billings	(582,525		)	(541,784		)
Net position	$	(424	)	$	(3,346	)



	June 30, 2018			December 31, 2017
Construction contract costs and estimated earnings in excess of billings	$	1,287		$	245
Billings in excess of construction contract costs and estimated earnings	(1,711		)	(3,591		)
Net position	$	(424	)	$	(3,346	)

The Company’s balances and changes in construction contract price allocated to unsatisfied performance obligations (backlog) as of June 30, 2018 and December 31, 2017 were as follows (in thousands):



	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
Beginning backlog	$	30,733		$	157,722		$	49,167		$	217,718
New contracts/change orders	27,807			15,519			32,376			18,960
Work performed	(20,619		)	(56,584		)	(43,622		)	(120,021		)
Ending backlog	$	37,921		$	116,657		$	37,921		$	116,657

The Company expects to complete a majority of the uncompleted contracts as of June 30, 2018 during the next 12 to 18 months.